Laos govt turns off pumps for new fuel importers, exporters
VIENTIANE (Vientiane Times/ANN) - The government will not consider new investment proposals from businesses wanting to set up fuel import/export operations, a senior official at the Ministry of Industry and Commerce official has said.
The ministry is aiming to reduce the number of fuel import/export firms to five or six, in line with Prime Ministerial Decree No. 331 issued on October 27, 2017, and the Prime Minister’s Order issued on August 23, 2018.
Deputy Director General of the Domestic Trade Department, Mrs Thanom Keoxayachak, told Vientiane Times on Tuesday “We will not take into consideration any new investment proposals.”
“Authorities are giving existing oil firms a chance to adjust themselves to the conditions and standards of the decree first,” she added.
Mrs Thanom said that if existing firms did not make changes to match the new requirements, authorities would offer opportunities to other firms who were interested in setting up fuel import/export operations and were able to comply with all of the conditions stated in the decree.
The decree has given a timeframe of one year for existing oil firms to improve their operations. Besides fuel import/export firms, the decree covers domestic wholesale and retail sale outlets or pump services.
The Lao State Fuel Company, a leading oil supplier, plans to split its operations into four subsidiary firms, in line with the decree. The four firms will take care of wholesale, retail distribution, warehouse leasing, and transport services. Each firm will have a specific registration.
According to the Petroleum and Gas Association’s statistics, Laos has 25 companies that import and sell fuel.
Laos has a small market for fuel, but there are many oil import and export firms, the department official said.
The decree will limit the number of fuel import and export firms, but will not restrict the number of businesses that operate domestic wholesale, retail sale and pump services, the official added.
“If an import company cannot continue this type of business, it can register for domestic wholesale or retail sales,” she said.
In the past, companies had to register 100 billion kip in capital to establish a business. They could import fuel and engage in domestic wholesale, retail sales and other services. But the decree increased this registration amount to 150 billion kip and also defined the details of each type of fuel business.
Fifty billion kip in registered capital is needed for a domestic wholesale company, which must have its own oil storage facilities capable of holding at least 5 million litres. The registered capital required to build a petrol station is 1 billion kip.