Vietnam has reduced domestic fuel prices through the Fuel Price Stabilisation Fund while advancing structural reforms, including the early rollout of E10 biofuel and proposed tax cuts on gasoline and diesel. These measures aim to balance energy transition goals with cost pressures amid global oil market volatility.
The Vietnamese government is accelerating its efforts to keep domestic fuel prices from fluctuating amid global volatility. The country’s petrol and oil prices have decreased sharply following an adjustment by the ministries of Industry and Trade and Finance on 25 March 2026:
- E5 RON 92 petrol fell by VND 2,040 (US$0.08) per liter to VND 28,070 (US$1.12);
- RON 95 dropped by VND 3,890 (US$0.16) to VND 29,950 (US$1.20) per liter;
- Diesel prices declined by VND 1,770 (US$0.07) to VND 37,890 (US$1.52) per liter;
- Kerosene by VND 4,100 (US$0.16) to VND 36,350 (US$1.45) per liter; and
- Mazut by VND 2,360 (US$0.09) to VND 20,240 (US$0.81) per kilogramme.
The price reductions are mainly due to the consecutive mobilisation of the Fuel Price Stabilisation Fund (FPSF), while other measures continue to show effectiveness. Simultaneously, new methods are pushed forward to further support businesses and balance energy transition and cost pressures.
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Identify where fuel price changes in Vietnam could create pressure across logistics, procurement, and distribution.Vietnam advances fuel policy reforms to balance energy transition and cost pressures
E10 roll-out brought forward to support energy transition
Vietnam is accelerating the nationwide deployment of E10 biofuel from April, advancing its earlier roadmap to phase out mineral gasoline. The move is expected to reduce conventional gasoline consumption by around 10 percent while supporting emissions reduction goals.
Major fuel distributors are scaling up readiness, including upgrading storage, blending systems, and distribution networks. However, supply constraints remain a key consideration: domestic ethanol production is estimated to meet only about 40 percent of demand, requiring increased imports and the reactivation of idle plants.
Beyond environmental benefits, the transition is also expected to stimulate upstream agricultural sectors, particularly cassava and corn, while prompting regulatory adjustments to ease compliance costs for fuel businesses.
Tax reduction proposal aims to ease fuel cost pressures
Separately, the Ministry of Finance (MOF) is proposing a 50 percent reduction in environmental protection tax on gasoline and diesel, as part of efforts to stabilise domestic fuel prices. Under the draft, gasoline tax would be reduced from VND2,000 (US$0.08) to VND1,000 (US$0.04) per litre, while diesel would fall from VND1,000 (US$0.04) to VND500 (US$0.02) per litre.
As an indirect tax embedded in retail prices, the proposed cut could reduce gasoline prices by VND1,080 (US$0.043) per litre and diesel by around VND540 (US$0.022) per litre, after VAT adjustments. The measure is expected to be temporary, remaining in effect through June, with possible extension subject to further review.
The proposal reflects broader policy coordination to mitigate rising global oil price pressures, alongside continued use of the petroleum price stabilisation fund to manage domestic market volatility.
Implemented measures to stabilise domestic fuel prices
Vietnam’s government has responded quickly to the global energy shock, establishing a task force on national energy security to develop policy responses to mitigate the impact of rising fuel costs on businesses and households.
Fuel Price Stabilisation Fund mobilised
Since late 2023, the government has largely refrained from using the FPSF, allowing reserves to accumulate. As of Q3 2025, the fund held approximately VND 5.6 trillion (about US$224 million), with Petrolimex accounting for the largest balance, totalling VND 3.085 trillion (around US$123 million).
In response to the complex fluctuations of global fuel prices, movements in the USD/VND exchange rate and existing regulations, and in implementation of Government Resolution No. 36/NQ-CP, dated 6 March 2026, on the government’s regular meeting for February, as well as the Minister of Industry and Trade’s Decision No. 441/QD-BCT, dated 10 March 2026, on the use of the FPSF, the two ministries decided on an adjustment plan that combines price stabilization with domestic price adjustments.
The policy continues to maintain a reasonable price gap between E5RON92 biofuel petrol and RON95-III petrol to encourage the use of biofuels in line with the Government’s orientation, while ensuring a fair balance of benefits for market stakeholders.
In the eighth consecutive draw from the FPSF, authorities allocated:
- VND 3,000 (US$0.12) per litre for petrol, kerosene, and mazut; and
- VND 4,000 (US$0.15) per litre for diesel.
Enabling faster domestic price adjustments
Vietnam’s Resolution No. 36/NQ-CP, issued on 6 March 2026, introduces mechanisms that allow more flexible fuel price adjustments.
Under the resolution:
- Domestic fuel prices can be adjusted before the regular weekly review cycle if the base price increases by 7 percent or more.
- Authorities may also activate additional stabilisation mechanisms if fuel prices experience consecutive increases within a month exceeding 20 percent and pose risks to macroeconomic stability or inflation.
These provisions allow regulators to react more quickly to international price movements and prevent sudden shocks to domestic markets.
Temporary cuts to fuel import tariffs
To support supply stability, the MOF proposed temporary reductions to the Most Favoured Nation (MFN) import tariffs on various petroleum products.
The government formalised the proposal in Decree No. 72/2026/ND-CP, issued on 9 March 2026, which reduces import tariffs on several fuel categories to 0 percent.
The tariff cuts apply to:
- Unleaded gasoline;
- Naphtha and reformate used in gasoline blending;
- Diesel fuel;
- Aviation fuel; and
- Certain petrochemical feedstocks.
Previously, MFN tariffs ranged from 7 percent to 10 percent, depending on the product category. The decree is effective from 9 March to 30 April 2026, aiming to support domestic fuel supply and dampen price increases.
Calls for fuel conservation
In addition to fiscal measures, the government has urged businesses and consumers to reduce fuel consumption where possible.
Authorities have called on ministries, enterprises, and local governments to:
- Optimise logistics and transportation operations;
- Increase energy efficiency across industries; and
- Encourage public awareness of fuel conservation.
These efforts are intended to reduce pressure on domestic supply during periods of global market disruption.
Earlier reactions of businesses as transport costs rise
In response to rising fuel costs, Vietnamese logistics and transportation companies have begun adjusting their pricing structures, highlighting the potential for broader inflationary pressures across supply chains. Several freight operators have issued notices to clients announcing increases in transport fees.
Many transport providers have also shortened the validity of price quotations to 24 hours, reflecting the rapidly changing fuel market environment.
Earlier on 8 March, some logistics firms introduced contingency pricing scenarios tied directly to diesel prices. For example:
- Diesel prices between VND 25,000–30,000 per litre (approximately US$1–1.2): surcharge of VND 100,000 per container (about US$4).
- Diesel prices between VND 30,000–35,000 per litre (approximately US$1.2–1.4): additional VND 100,000 per container surcharge (about US$4).
Other companies have implemented fuel-linked pricing structures based on a reference diesel price. Meanwhile, on 9 March, The Railway Transport Joint Stock Company (VRT) announced a 10 percent increase in passenger ticket prices and a 15 percent rise in freight rates.
Monitoring the outlook: What steps should businesses take?
Vietnam’s response to the recent global oil price surge highlights the government’s willingness to deploy a combination of price stabilisation mechanisms, tax adjustments, and supply-management tools to mitigate market volatility. For businesses operating in Vietnam, these developments present several important considerations.
Expect short-term fuel price volatility
Although global oil prices have shown signs of cooling, energy markets remain highly sensitive to geopolitical developments and supply disruptions. Businesses, particularly those in logistics, manufacturing, and transportation, should anticipate continued volatility in fuel costs and incorporate flexible pricing or cost-adjustment mechanisms into contracts where possible.
Monitor policy adjustments affecting fuel costs
Recent measures, such as temporary import tariff reductions on fuel products and potential activation of stabilisation mechanisms, indicate that the government may continue adjusting fiscal and regulatory tools to contain domestic price increases.
Companies should closely monitor:
- Fuel pricing regulations and stabilisation policies;
- Temporary tax or tariff adjustments affecting petroleum imports; and
- Changes to domestic fuel price review mechanisms.
Such policies can influence operational costs, logistics planning, and supply chain pricing structures.
Opportunities in energy efficiency and alternative fuels
The current price surge may also accelerate policy support for fuel efficiency and alternative energy solutions, including the expansion of biofuels such as E10 gasoline.
Businesses may find opportunities in:
- Energy-efficient transportation and logistics solutions;
- Industrial energy management technologies; and
- Biofuel production and distribution supply chains.
Companies investing early in these areas could benefit from policy incentives and growing demand for lower-cost energy alternatives.
Domestic supply resilience offers market stability
Despite global volatility, Vietnam retains a relatively strong domestic energy position. The country currently meets approximately three-quarters of its fuel demand through domestic refining, primarily through the Binh Son and Nghi Son refineries. As of 25 March, output at Dung Quat Refinery increased by 10.5 percent, with enough feedstock secured until late April or early May, while Nghi Son Refinery continues operations through April. Imports have also risen, supporting supply stability.
This domestic supply base gives the government greater flexibility to stabilise markets than economies that rely heavily on imported refined fuel products.
For investors and manufacturers, this structural advantage may help limit the long-term impact of global energy shocks on Vietnam’s production environment.
See also: Iran Conflict and Vietnam’s Economy: Early Impacts
(US$1 = VND 25,000)
(This article was originally published on 10 May 2026. It was last updated on 26 March2026.)
