Phung Thi Minh Chau, a resident of Dinh Cong ward in Hanoi, voiced her frustration after a recent trip to the market. For her, the only noticeable change has been cheaper fuel, while prices of other goods remain stubbornly high.

Businesses slow to cut prices

Chau recalled that throughout March, the phrase she heard most often at markets was “price increase.” Tofu rose by VND5,000 per kilogram (US$0.20), offerings of sticky rice for rituals increased by VND5,000, while processed pork products climbed by VND10,000-15,000 per kilogram (US$0.40-0.60). Fried spring rolls edged up from VND6,000 to VND6,500 each (US$0.24 to US$0.26), and even street-side coffee and fruit juice became VND3,000-5,000 more expensive (US$0.12-0.20).

At the time, vendors attributed the increases to rising fuel costs, noting that even packaging such as plastic bags had become more expensive.

Yet now, despite a significant drop in fuel prices, many goods remain unchanged, Chau noted with disappointment.

Tran Van Cong, from Tuong Mai ward in Hanoi, shared a similar experience. He recalled that in mid-March, a bowl of pho at a neighborhood eatery rose from VND35,000 to VND40,000 (US$1.40 to US$1.60), citing rising fuel costs.

“Back then, the increase made sense because input costs were rising. But now fuel prices have fallen sharply, and the bowl still costs VND40,000,” he said, describing the situation as a clear contradiction.

Across the market, several items have seen steep increases. Oranges climbed from VND200,000 to VND300,000 per 18kg box (US$8 to US$12), tangerines jumped from VND25,000 to VND55,000 per kilogram (US$1 to US$2.20), while coconuts surged from VND240,000 to nearly VND400,000 per box of 30 (around US$10 to US$16.50). Vendors attributed these increases partly to seasonal factors, but also to higher transport costs.

According to a report by the Ministry of Industry and Trade’s domestic market management team, global fuel and energy prices surged following geopolitical tensions involving the US, Israel, and Iran since late February. This pushed up domestic fuel prices and in turn affected supply and demand for agricultural inputs, produce, and construction materials.

Data from the General Statistics Office shows that the consumer price index (CPI) in the first quarter of 2026 rose by 3.51% year-on-year. Notably, housing and construction materials increased by 5.69%, food and catering services by 4.55%, and other goods and services by 3.68%.

Price cuts take time

From early March to April 9, domestic fuel prices were adjusted 13 times in line with global trends. Diesel prices peaked at VND44,788 per liter (US$1.80) on April 3 before dropping by VND11,819 (US$0.47), or nearly 26.4%, in subsequent adjustments.

Similarly, RON95 gasoline fell by VND10,297 per liter (US$0.41), equivalent to a 30.4% decline from its peak of VND33,840 (US$1.35) recorded on March 24.

Despite these sharp reductions, many businesses remain hesitant to lower prices. Do Thi Ha, who runs an online meal service in Dinh Cong, said price cuts are not yet feasible.

She explained that food prices depend heavily on input costs. While fuel prices have eased, other costs remain elevated. Gas cylinders are still priced at nearly VND630,000 each (US$25), packaging costs have nearly doubled, and agricultural products remain expensive. As a result, she previously raised meal prices by VND5,000-10,000 per portion (US$0.20-0.40) to offset rising costs.

“Fuel prices may have dropped, but other inputs have not. Transport costs also need time to adjust, so we cannot reduce prices immediately,” she said.

Economic expert Nguyen Hoang Dung noted that while fuel costs directly account for only about 5-10% of the cost of a bowl of pho, their indirect impact through transportation and logistics can influence 20-30% of total costs.

In theory, when variable costs such as fuel decline, retail prices should follow. However, in practice, prices tend to rise quickly but fall slowly. Sellers often hesitate to adjust prices downward due to concerns that fuel prices may rise again. Frequent price changes also incur operational costs, including printing and communication.

Beyond fuel, fixed costs such as rent, labor, and utilities typically increase and rarely decrease, creating a buffer that allows businesses to maintain current prices. More importantly, in a market economy, pricing is shaped not only by costs but also by supply and demand and perceived value. As long as consumers accept higher prices, there is little incentive to reduce them.

Le Quoc Phuong, another economic expert, added that rising fuel prices naturally push up goods prices, as fuel is a key input across many industries.

However, he explained that fuel prices have been highly volatile, changing frequently over recent weeks. In such conditions, retail prices cannot realistically adjust at the same pace.

Certain sectors, such as transportation, require formal approval before adjusting prices. Meanwhile, in food services, frequent price changes can significantly affect customer behavior and sentiment.

Additionally, price adjustments across supply chains typically involve a lag of 15 days to one month, depending on when businesses purchased their inventory.

For instance, if goods were sourced in late March when fuel prices were high, retailers must maintain higher prices until those inventories are cleared. This lag effect is a key reason why retail prices have yet to decline in line with falling fuel costs.

Tam An