Petrolimex cautions about the material impact of electric vehicles on retail gasoline and diesel sales

Petrolimex forecasts that retail gasoline and diesel sales will face significant pressure starting this year, with the impact expected to become more pronounced in the coming years as electric vehicles (EVs) spread further.

Targets for 2024: revenue growth, profit decline

In documents submitted for the Vietnam Oil and Gas Corporation (Petrolimex) annual shareholder meeting later this month, the Board of Directors said the company expects more difficulties and challenges than favorable conditions in 2024.

Petrolimex set a revenue growth target of 2%, to 315,000 billion dong. Net profit after tax is expected to fall 7%, to 3,380 billion dong, which the company described as the lowest level in four years.

Demand outlook: volume growth but EV and city restrictions weigh

Petrolimex leadership said sales volume is expected to grow 8.5–10% in 2024 and 2025. While EVs are beginning to have a clearer impact, they have not yet dominated the market, as the number of internal combustion engine vehicles remains large.

The company also pointed to a plan to limit petrol vehicles in inner cities from next year, saying this will affect production in major cities.

2028–2030: volumes may plateau as EVs and green fuels advance

For the 2028–2030 period, Petrolimex expects traditional gasoline and diesel volumes to peak or begin to plateau. The company projects that the combined impact of EVs, green fuels, and vehicle-restriction policies will become more pronounced by then.

Petrolimex cited several factors behind this outlook, including potential EV price declines, improved charging infrastructure and incentive policies, and fuller implementation of restrictions on gasoline- and diesel-using vehicles in major cities—pressuring sales volumes in those areas.

Offset factors: highways, growth and freight demand

Petrolimex said projects to develop highway networks, economic growth, and freight transport demand are expected to offset part of the decline in volumes.

External risks: Middle East conflict and higher logistics costs

In its audited financial statements, management said the Middle East conflict has also harmed the normal business environment. Because Petrolimex depends heavily on oil from the Middle East, since the conflict began global prices have risen sharply, particularly for DO oil. The company also noted that international shipping costs have increased alongside fuel prices, with unusual freight surcharges.

Five-year plan: revenue tied to volume growth, profit and dividends rising

Over the next five years, Petrolimex aims for revenue growth not lower than volume growth, with expected 7% per year. Profit is expected to rise 6–7% per year, and ordinary dividends are expected to increase by 8–10%.

Scale and recent performance

Petrolimex is Vietnam’s largest petrol retailer. The company estimates it holds about 50% market share by sales and operates a network of 5,500 petrol stations nationwide.

Last year, Petrolimex reported revenue rising more than 9% to about 310,000 billion dong, while pre-tax profit fell about 8% to 3,643 billion dong.

Stock performance

On the stock market, Petrolimex shares are trading around 39,000 dong, up about 10% since the start of the year.