On Tuesday it raised the price of the popular RON95 fuel by 7.69% to VND29,120 (US$1.11) per liter.
Biofuel E5 RON92 increased by 5.35% to VND26,570. Diesel prices increased by 1.59% to VND30,710.
For the first time in three years the Ministry of Industry and Trade and the Ministry of Finance have had to use the fuel stabilization fund to subsidize RON95 by VND4,000 per liter and diesel by VND5,000.
RON95 is now at roughly the same level as in July 2022 when the Russia–Ukraine conflict disrupted the global fuel supply chain. Diesel is at its highest level since 2019.
The global market was affected over the weekend by the continuing military conflict between the United States, Israel and Iran, according to the ministries.
All oil-exporting countries in the Gulf have reduced production as transport through the Strait of Hormuz has been disrupted.
The fact that most countries are stockpiling fuel has also caused global prices to rise sharply.
The price of RON95 gasoline has shot up by 27% to $147.5 per barrel, diesel by 20%, kerosene by 4%, and mazut by 41%.
In Vietnam, fuel prices were adjusted Tuesday, instead of Thursday as usual, as global prices changed by more than 7%. Though global prices have started to cool, domestic prices remain elevated due to a lag in the pricing cycle.
An employee refills a motorbike at fuel station in Ho Chi Minh City, September 2022. Photo by VnExpress/ Quynh Tran |
On Tuesday morning prices began to decline following U.S. President Donald Trump’s statement that the conflict in the Middle East will end soon.
The prices of RON95 gasoline and diesel have fallen by around $20 per barrel in Singapore to $127.2 and $160.4. The lower levels will be reflected in Vietnam following the next adjustment.
Deputy Minister of Industry and Trade Nguyen Sinh Nhat Tan said the government had mobilized four million barrels of oil from partners to ensure short-term supply.
With this crude oil and additional supplies expected soon, he estimated the supply would be sufficient for 30–45 days depending on demand and production plans at domestic refineries.
The government is also using tax and fee measures to control retail prices. Most favored nation import tariffs on gasoline and some blending materials have been cut to zero to encourage distributors to import fuel from countries that do not have free trade agreements with Vietnam.
The Ministry of Finance is asking the government to scrap the environmental protection tax on fuel from March 12. Currently this stands at VND1,000-2,000 per liter depending on the type of fuel.
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