The problems at the Dung Quat refinery stem from Vietnam's centralized state-owned petrol distribution system, which overestimated demand, officials said.

'The refinery has a storage capacity of 300,000 tons, but we've already filled 70 per cent,' said Nguyen Hoai Giang, general director of plant operator Binh Son Refinery Company (BSR), a subsidiary of state-owned PetroVietnam.

If autumn storms were to prevent tankers from docking at the refinery, its remaining storage would be filled in 10 days, Giang said.

The refinery can meet just 33 per cent of Vietnam's demand for petrol, but has been unable to sell all of it because, with government support, it boosted production earlier this year from 80 per cent to 100 per cent of capacity.

Earlier estimates of high petrol demand and a government mandate to stabilize prices had led Petrolimex, the state-owned petrol distributor, to sign large import contracts. Distributors must take delivery of those imports, leaving Dung Quat's domestic petrol sitting at the plant.

Petrolimex Deputy Director Dam Thi Huyen blamed the error on PetroVietnam, saying it should have taken import contracts into account, the official Vietnam News reported Friday.

Deutsche Presse Agentur - October 8, 2010