Vietnam may face a "refinery inflation"since the country will be home to a total of seven oil refineries in the next few years compared to the sole Dung Quat facility at present, experts warned.

Many oil refinery and petrochemical projects worth billions of US dollars have obtained the agreement in principle from local authorities for their investment, and when they are operational, their total capacity will be much greater than the country's current demand, local Tuoi Tre (Youth) newspaper reported Friday.

Specifically, of the future oil refineries, the Nghi Son project will be the first constructed at the end of this month, according to schedules.

Construction of the 9 billion USD-worth project in central Thanh Hoa province is expected to be completed by the end of 2014, and the plant will begin commercial operation by 2017.

The Vung Ro Oil Refinery, located in Nam Phu Yen Economic Zone in central Phu Yen Province, is completing its initial steps to begin construction.

Earlier this year, Vietnamese Prime Minister Nguyen Tan Dung gave the investor Britain-based Tachnostar Management Ltd. the go- ahead to double the plant's design capacity to 8 million tons of product per year, and increase investment from 1.7 billion US dollars to 3.18 billion US dollars.

Another noteworthy player to join the market is the Nhon Hoi Refinery, based in the Economic Zone of the same name in the coastal Binh Dinh province.

The 27.5 billion USD-worth project, invested by Thai state- owned oil and gas company PTT Public Company Limited, is in fact not included in the development plan of the country's oil and gas sector.

But local authorities and other ministries and agencies have strongly proposed to have the project added into the national master plan.

Meanwhile in central Ha Tinh province, the local government has also planned to green-light the Taiwanese Formosa Group to start a 12.5 billion US dollars refinery and petrochemical project in the province.

At present, the country's sole refinery Dung Quat accounts for 30 percent of the domestic demand for fuel consumption.

A capacity upgrading plan has also been approved under which the plant is able to produce up to 10 million tons of oil products per year by 2015.

Under the strategic development plan of the oil and gas sector, Vietnam will have only three refineries, namely Dung Quat, Nghi Son and Long Son (based in northern Vung Tau province), the report quoted Phung Dinh Thuc, chairman of the state-run oil and gas group, PetroVietnam, as saying.

According to the Vietnamese Ministry of Industry and Trade (MIT) , when the Long Son, Nam Van Phong refineries are put into use after 2020 and the Nhon Hoi facility begins operating by 2020, the total supply of oil products will be 36 million tons, while total domestic demand is only some 29 million tons. As a result by 2025, the surplus will rise to 11 million tons.

Experts said while many other countries are seeking alternative energies or biofuel products, Vietnam is boosting refinery investment, which will cause a number of disadvantages for the country if not appropriately assessed.

As Vietnam's crude oil reserves are running out, future refineries may have to import crude oils for treatment.

Vietnam has been exploiting crude oil from Bach Ho (White Tiger) , one of the country's largest refineries, over the last 25 years. Dung Quat, the country's sole refinery so far, is the only facility to use a domestic source of oil. In fact, it is planned that most of the future refineries will use imported crude oil from the Middle East, Africa and South and Central America.

The government should consider factors like pollution, supply surplus and the world's energy trend before approving new refinery projects. With only Dung Quat oil refinery in operation, we have already faced a number of challenges,"the report quoted economic expert Le Dang Doanh as saying.

Local experts showed their great concern that Vietnam may become a place where foreign investors dump their obsolete, pollution-causing technology and machinery.