Vietnam’s plan to raise national fuel reserves to 90 days is increasingly seen as essential to ensuring supply stability and price control in emergency situations. However, under current conditions, experts say businesses must share the burden alongside the State.

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Fuel prices have fluctuated sharply in recent weeks. Photo: Nam Khanh

In recent weeks, escalating military conflict in the Middle East has created a major energy bottleneck, disrupting the flow of around 11 million barrels of oil per day through the Strait of Hormuz.

This shock has not only driven crude oil prices sharply higher but also triggered ripple effects on inflation, import costs, and global economic growth.

For Vietnam, the pressing question is how to expand reserve capacity and ensure energy security while public financial resources remain constrained.

Raising reserves to 90 days is necessary

Under Resolution No. 70-NQ/TW dated August 20, 2025, on ensuring national energy security to 2030 with a vision to 2045, the Politburo set a target of achieving fuel reserves equivalent to around 90 days of net imports by 2030. The resolution also calls for developing a storage system for crude oil and petroleum products aligned with socio-economic development and national security needs, both onshore and offshore.

In late March, during a working session with the energy security task force, Prime Minister Pham Minh Chinh instructed the Ministry of Industry and Trade to study solutions to enhance fuel reserve capacity, aiming to meet the 90-day target. He also ordered the immediate development of a strategic petroleum reserve facility in Nghi Son, Thanh Hoa.

According to Nguyen Tien Thoa, Chairman of the Vietnam Valuation Association, national reserves of strategic commodities, including petroleum, represent a critical state-managed resource.

Such reserves play a vital role in responding to emergencies such as natural disasters, epidemics, and fires, while also ensuring national defense, stabilizing markets, and safeguarding social welfare.

In practice, the need to expand reserves has become increasingly urgent, particularly in light of recent extreme weather events and the risk of global supply disruptions linked to the Middle East conflict in March 2026.

“This is essential to ensure uninterrupted fuel flows for the economy, meet consumption demand, and maintain national energy security under all circumstances,” Thoa emphasized.

However, due to various constraints, Vietnam’s current national reserves cover only about 7 to 10 days of consumption. In addition, commercial reserves held by key distributors account for roughly 20 days, with another five days held by distribution traders, along with production reserves at the country’s two refineries.

Experts say this remains far below the 90-day net import target outlined in Resolution 70.

Businesses must share the burden

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Raising national petroleum reserves to 90 days will require mobilizing businesses to share the burden with the State. Photo: BSR

To achieve the 90-day reserve goal, Nguyen Tien Thoa stressed the need for a fundamental overhaul of policies governing state reserves.

This includes promoting socialization and mobilizing maximum resources from the State, businesses, and foreign investors to develop storage infrastructure and manage reserves.

He also called for supportive policies on land, taxes, fees, and interest rates, along with assistance for management, maintenance, and storage costs. Flexible mechanisms for risk-sharing and inventory rotation between buying and selling should also be introduced.

At the same time, decentralization and delegation of authority must be clear and transparent, accompanied by administrative reforms aimed at simplification. The application of digital technologies in reserve management should also be accelerated, he added.

Bui Ngoc Bao, Chairman of the Vietnam Petroleum Association, noted that achieving a 90-day reserve level would require substantial financial resources.

Given current economic conditions, relying entirely on the state budget would be a major challenge. Beyond purchasing fuel, significant investment would also be needed to build storage infrastructure. Therefore, a more flexible approach is required rather than placing the full burden on the State.

Regarding infrastructure, he suggested a practical solution through socialization, encouraging capable enterprises to invest in standardized storage facilities, which the State could then lease for national reserve purposes.

In parallel, Vietnam could combine national reserves with centralized circulating reserves. Under this model, alongside state-funded reserves, a centrally managed system of circulating reserves would be established instead of the current fragmented model across enterprises. This system should be coordinated by the Ministry of Industry and Trade to enhance nationwide regulatory efficiency.

Bao also proposed utilizing the fuel price stabilization fund as a resource base for such reserves.

He noted that maintaining the fund primarily in cash only helps mitigate short-term price shocks while creating management pressure. To improve efficiency, the fund should be flexibly allocated between cash and physical reserves - for example, maintaining around 30 percent in cash and 70 percent in fuel when prices are low.

According to the association chairman, these solutions would not only reduce pressure on public investment but also make better use of social resources, contributing to price stabilization, supply security, and strengthened national energy resilience.

If effectively implemented, Vietnam’s fuel reserves could exceed the 90-day threshold.

Tam An