The Government of Laos has called on society to try to save petrol as much as possible amid a growing fuel crisis in the country.
Petrol prices have seen 11 adjustments this year, with the government making every attempt to reduce taxes and other tariffs to lessen the impact on consumers.
Disruptions to supplies of commodities, financial strains, and higher prices are among the shocks felt by Asian economies after Russia’s war in Ukraine, according to a report from the World Bank, with prices for oil, gas and other commodities being driven up.
Fuel-importing countries like Laos, already suffering in the wake of the Covid-19 pandemic, have been hit hard by rising oil prices which must be paid for in foreign currency.
The issue came to a head in Savannakhet Province this week as petrol stations ran out of fuel, causing panic among residents.
Director of the Department of Industry and Commerce of Savannakhet Province, Mr. Phosysoy Kuthilath, told the media in a statement that ongoing conflicts among the world’s oil-producing countries have lead to higher prices.
“An increase in imports of foreign goods results in an increased demand for foreign currency [to pay for those goods]. When demand for foreign currency is high, our currency depreciates,” he said.
The Lao kip has taken a dramatic tumble this year, depreciating to historic lows.
“But our foreign currency reserves are not enough to meet demand in the fuel sector,” Mr. Phosysoy continued, saying that this had affected supplies of fuel.
Mr. Phosysoy said that while in the past there had been up to 13 companies importing fuel into Laos, the country now had only four such importers left.
“While demand for fuel is high, supply has decreased,” he added.
The issue has led to stockpiling and the black market sale of fuels in Savannakhet, with vendors openly reselling petrol at roadside stalls.
Mr. Badidsinh Razmontry, Head of the Lao State Fuel Enterprise in Savannakhet Province, told the media that fuel imports in early 2022 have been declining every month, with imports in March down 18% from February, while April imports had decreased by 24%.
The government and the National Assembly have had consultation meetings with the private sector to discuss ways to stabilize fuel prices, with the finance ministry in favor of reducing excise tax, or even scrapping it altogether.
Meanwhile, government officials have called upon residents across the nation to make every attempt to save petrol as much as possible by carpooling, using public transport, or traveling less frequently.