Flexible management activates a wave of stabilization measures

In recent weeks, escalating military tensions in the Middle East have driven global fuel markets sharply upward. As a net importer of petroleum products, Vietnam has faced mounting pressure from rising prices and potential supply disruptions.

Fuel is a strategic commodity, central to production, business operations and daily living. When supply is disrupted and prices surge, the economy risks entering a state of stagflation - high inflation combined with slowing growth.

Yet over the past month, domestic fuel supply has remained largely secure, with supply chains operating smoothly. Price increases have been brought under control, and levels have retreated significantly from their peaks, easing pressure on businesses and households.

According to Nguyen Thuong Lang, an expert at the Institute of Trade and International Economics under the National Economics University, this outcome reflects the government’s flexible management and “swift” policy responses.

Notably, regulators have adjusted fuel prices in line with market movements, even shortening the pricing cycle when necessary - a rare move in the past.

Coordinated policies bring prices down

Following the outbreak of conflict in the Middle East, the Prime Minister established a task force to ensure energy security, tasked with monitoring developments and resolving emerging challenges.

On March 6, the government authorized the ministries of Industry and Trade and Finance to adjust prices whenever the base price rose above 7 percent, without waiting for the standard seven-day cycle. This mechanism, applied from March 7, helped align domestic prices more closely with global trends and avoid sudden shocks.

On March 19, the mechanism was further refined under Resolution 55, allowing adjustments within one day if base prices rose by 15 percent or fell by more than 10 percent.

At the same time, the fuel price stabilization fund was activated nine times within a month, with total disbursements estimated at VND5.3 trillion (US$217 million).

The government also reduced preferential import tariffs on certain fuel products to 0 percent from March 9 to April 30, 2026, enabling businesses to secure supply amid volatile global markets.

On March 20, the Politburo issued Conclusion No. 14-KL/TW on ensuring fuel supply and price stability, calling for proactive forecasting, coordinated fiscal and monetary tools, and stricter market oversight to prevent hoarding and trade fraud.

More recently, Decision 482 introduced tax measures for fuel and aviation fuel in cases of national necessity.

From midnight on March 26 to April 15, 2026, environmental protection taxes on gasoline (excluding ethanol), diesel and aviation fuel were reduced to zero. These products are also exempt from value-added tax declarations while still allowing input tax credits.

Special consumption tax on gasoline was cut from 8-10 percent to 0 percent. The Ministry of Finance estimates these tax reductions could lower state revenue by about VND7.2 trillion per month (US$295 million), but views them as essential to stabilizing prices and easing cost pressures.

Proactive scenarios for an uncertain global outlook

Thanks to these coordinated measures, domestic fuel prices have fallen sharply from their peak, helping stabilize market sentiment and contain inflation.

In the March 26 pricing adjustment, E5 RON92 gasoline dropped to VND23,326 per liter (US$0.96), down VND6,788 (-22.5 percent) from its peak on March 24.

RON95-III gasoline fell by VND9,508 (-28.1 percent) to VND24,332 per liter (US$1.00).

Diesel 0.05S decreased by VND4,226 (-10.65 percent) to VND35,440 per liter (US$1.45), while kerosene dropped from VND40,455 to VND35,384 per liter (US$1.45), a decline of 12.5 percent.

Despite these gains, ongoing tensions in the Middle East and potential disruptions in energy flows through the Strait of Hormuz continue to pose risks, requiring authorities to prepare for multiple scenarios.

On March 27, the government issued Resolution 69, allowing an advance of VND8 trillion (US$328 million) from increased central budget revenues in 2025 to the fuel price stabilization fund.

The Ministry of Finance has also proposed extending the zero-tax policy on fuel through June 2026 to further support inflation control and business activity.

These moves highlight the government’s increasingly proactive role in managing the fuel market and adapting to external shocks.

From short-term interventions to long-term strategies on supply and reserves, the measures aim to maintain stable energy flows and reduce vulnerability to global disruptions.

As Nguyen Thuong Lang noted, the policies closely reflect real-world conditions and have proven effective in bringing domestic fuel prices down rapidly.

They also demonstrate a capacity for swift and effective policy response, reinforcing confidence among businesses and the public.

Tam An