Fuel prices in Vietnam have risen sharply once again, prompting the government to step in with subsidies from its fuel stabilization fund in an effort to cushion the impact on consumers.
On Tuesday, March 10, authorities increased the price of the widely used RON95 gasoline by 7.69%, bringing it to VND29,120 (US$1.11) per litre. The price of biofuel E5 RON92 also climbed by 5.35% to VND26,570 per litre. Diesel saw a smaller rise of 1.59%, reaching VND30,710 per litre.
For the first time in three years, the Ministry of Industry and Trade and the Ministry of Finance tapped into the fuel stabilization fund to help offset the increases. Under the measure, RON95 gasoline is being subsidised by VND4,000 per litre, while diesel is receiving a subsidy of VND5,000 per litre.
The latest increase brings RON95 prices close to levels last seen in July 2022, when the Russia–Ukraine conflict disrupted global fuel supply chains. Diesel prices have now climbed to their highest point since 2019.
Officials said that developments in the global market have played a major role in pushing prices upward.
The ongoing military tensions involving the United States, Israel and Iran have unsettled energy markets, while transport disruptions through the Strait of Hormuz have affected oil shipments from Gulf producers. Several oil-exporting countries in the region have also cut production, tightening supply.
At the same time, many countries have begun stockpiling fuel, further driving up global prices. RON95 gasoline prices on the international market have surged by 27% to US$147.5 per barrel. Diesel prices have risen by 20%, kerosene by 4% and mazut by 41%.
Vietnam typically adjusts fuel prices on Thursdays, but this week's revision was brought forward to Tuesday because global price movements exceeded the 7% threshold that triggers an earlier review. Although international prices have started to ease slightly, domestic fuel prices remain high due to delays in the pricing adjustment cycle.
Some relief may be on the horizon. Following a statement from US President Donald Trump suggesting that the Middle East conflict could end soon, oil prices began to decline on Tuesday morning. In Singapore, benchmark prices for RON95 gasoline and diesel have already dropped by around US$20 per barrel to US$127.2 and US$160.4 respectively. These reductions are expected to be reflected in Vietnam during the next pricing adjustment.
Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said the government has also secured four million barrels of oil from partners to maintain supply in the short term. Combined with expected additional shipments, the reserves should be enough to meet demand for about 30 to 45 days, depending on refinery output and consumption levels.
Authorities are also considering further policy measures to keep retail fuel prices under control. Import tariffs under the most-favoured-nation scheme for gasoline and certain blending materials have been reduced to 0%, allowing distributors to source fuel from countries without free trade agreements with Vietnam.
In addition, the Ministry of Finance has proposed removing the environmental protection tax on fuel starting March 12. Currently, the tax ranges between VND1,000 and VND2,000 per litre depending on the type of fuel. Officials hope the move will provide additional relief for consumers and businesses facing rising energy costs.
