Long lines for gasoline in Laos as shortage worsens

Rising global prices and the rapid depreciation of the kip are blamed for the crisis at the pump.
By RFA’s Lao Service
2022.05.23
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Long lines for gasoline in Laos as shortage worsens Motorcyclists line up for gas in Laos amid shortages, May 10, 2022.
Photo: RFA

A gasoline shortage in Laos has motorists queuing in long lines for hours, only to drive away with a small amount of fuel, or none at all, sources in the country told RFA.

The price of gas has risen worldwide since the Russian invasion of Ukraine has rattled oil markets and put a strain on the global supply.

Landlocked Laos has no oil reserves and imports most of its gasoline from neighboring countries. Though a newly built refinery began operations in 2020, the country’s gas prices are the most expensive in the Association of Southeast Asian Nations (ASEAN) outside of Singapore.

According to the GlobalPetrolPrices.com website, as of May 16, gasoline in Laos cost U.S. $6.35 per gallon.

Laos usually imports 120 million liters (31.7 million US liquid gallons) of gasoline each month but recently has been able to import only 20 million liters, an employee of a fuel importing company told local media.

The shortfall leaves Laotians in a daily scramble to get what they can.

“There simply is no gas at the pump,” a motorcyclist from the capital Vientiane told RFA’s Lao Service. “The government warns people not to hoard gas, and motorcyclists like me are only allowed to get 1.5 liters of gas at a time. That’s not enough to fill up the tank. If we don’t have gas, we can’t go to work, and the boss will complain.”

A government worker from the southern province of Champassak told RFA that most pumps in his area are only open for one hour each day.

“If you miss it, there will be no more gas that day,” the government worker said. “This is a serious crisis.”

No fuel for plowing

The lack of gasoline across Laos is affecting all segments of its economy and nearly every aspect of people’s lives.

A farmer in the northern province of Oudomxay told RFA that he cannot plow as frequently as he would like because of the lack of fuel.

“We have to get up early then walk between two to five kilometers to the farms, and then we don’t have gas to plow the rice fields either,” he said. “We’ll just have to wait for gasoline to come in.”

In northern Laos, transportation companies have been forced to leave their vehicles parked, one bus owner said. “It’s not worth continuing,” he said. “We have fewer passengers now.”

Residents of rural villages in Savannakhet province say the shortages leave them even more isolated, a villager told RFA.

“No gas, no going out. Only staying at home,” said one villager.

Another Savannakhet resident said a pregnant neighbor was almost forced to give birth at home because her husband didn’t have enough gasoline to drive her to her doctor.

“My car had some gas left, and I decided to take her to the hospital,” she said.

Meanwhile in Borikhamxay, the shortage is also complicating the ability of students to take their final exams, as many rely on motorbikes to commute to school, a principal of a high school told RFA.

“Many students live five kilometers or up to eight kilometers from the school … and now, they don’t have gas and can’t go to school,” the principal said. “Likewise, many teachers who live far away from schools some days don’t go to school or come late because they don’t have gas, or they were in line at the pump for gas.”

Kip fall behind shortage

Laos’ foreign currency problems are a chief cause of the gasoline shortage, Phosisoi Kouthilath, the director of the Industry and Trade Department of Savannakhet province, told RFA.

“In our country, the exchange rates are going up every day, especially the U.S. dollar. The fuel importers don’t have the dollars to import more gas. That’s why pumps are running out of gas.”

According to Asia News Network, the kip depreciated by 6% against the U.S. dollar between Jan. 4 and April 8. A report from the Bank of Laos (BOL) said that from February this year, the kip entered a period in which it set records for decreases in valuation relative to the U.S. dollar and the Thai baht.

An official of the Industry and Trade Department of Savannakhet Province said the currency devaluation is making it harder to import gas.

“We have to pay in foreign currency for gas,” the official said. “The government doesn’t have the money to give to the gas importing companies.”

Laos is entirely dependent on foreign fuel, Sisangkhom Khotyotha, chairman of the Lao Fuel and Gas Association, told RFA.

“All fuel in Laos comes from abroad. The importers must pay in U.S. dollars that keeps appreciating, but the kip keeps depreciating,” he said, adding that the demand for gas is also rising.

Turning to Russia?

The Lao Prime Minister’s Office issued a notice on May 6 ordering the Ministry of Finance, the Ministry of Industry and Trade and the Lao Fuel State Enterprise to begin negotiations to buy cheaper oil from Russia. But the situation in Ukraine and international opinion might complicate things.

“We’re setting up a national committee that will include the government agencies and gas importing companies. This committee will meet and discuss the possibility of buying Russian gas,” an official of the Ministry of Industry and Trade told RFA.

“However, it won’t be easy. It might be difficult to buy Russian gas because of the conflict with Ukraine,” the official said.

Getting the gas from Russia has logistical challenges as well, a government official told RFA on condition of anonymity.

“Usually, we import most of our gasoline from Thailand. To change the route won’t be that easy,” the government official said.

The Standing Committee of the Lao National Assembly, meanwhile, has agreed with a government proposal to halve all fuel taxes, an official at a fuel warehouse in Vientiane told RFA.

The Lao government is also attempting to switch its fleet of vehicles away from gas-powered cars to electric.

But that effort is a long way from having any effect on Laos’ gasoline market.  

Translated by Max Avary. Written in English by Eugene Whong.

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