Lao State Fuel Company to Transform into Public-Private Joint Venture

Government Initiates Major Restructuring of State Fuel Company

The government of the Lao People's Democratic Republic is moving to restructure the Lao State Fuel Company (LSFC) into a public-private joint venture. This significant reform was detailed in a report presented to the National Assembly on November 13, 2025, during its 10th Ordinary Session, which runs from November 10 to 21. The initiative is part of a broader government agenda to overhaul major state-owned enterprises (SOEs) across the nation.

Strategic Objectives and Private Sector Involvement

The primary goals behind transforming LSFC are to enhance operational efficiency, strengthen its financial position, improve management practices, and address persistent financial losses. Under the proposed structure, the government intends to retain at least a 51 percent stake in the new joint venture, ensuring majority control and safeguarding national interests.

To facilitate this transition, LSFC is actively seeking partnerships with financially capable private investors. Authorities are also in the process of selecting a reputable international consulting firm, with potential candidates including KPMG, Deloitte, PwC, or EY, to provide expert advice on operational planning and asset valuation.

Lao State Fuel Company's Historical Role and Operations

Established in 1976, the Lao State Fuel Company (LSFC) has historically operated as a 100 percent state-owned enterprise, playing a crucial role in ensuring the stability of petroleum energy supply for national socio-economic development and security. LSFC is a dominant player in the domestic fuel market, holding a market share of over 30 percent. Its extensive infrastructure includes:

• Seven branches in major provinces
• Fuel depots and warehouses with a total capacity of 26 million litres
• 326 gas service stations nationwide
• A modern transport fleet of over 140 trucks

LSFC has previously engaged in joint ventures, including a Lao-Chinese partnership for the country's first oil refinery where it held a 20 percent stake, and a biofuel production project with a South Korean company, GAIA Petro Co., Ltd., in which it held 22.5 percent.

Broader Government Reform Agenda

The restructuring of LSFC is consistent with the Lao government's wider reform efforts aimed at improving the performance of state-owned enterprises. This comprehensive agenda also targets other key entities for similar restructuring, including Electricité du Laos (EDL), Lao Airlines, and Nayoby Bank. These reforms are being pursued amidst macroeconomic challenges faced by the country, such as debt distress, currency depreciation, and high inflation.