Vietnam has slashed fuel import tariffs to zero and called on businesses to shift employees to remote work, as escalating conflict in the Middle East threatens to disrupt global oil supplies and drive prices to levels not seen in years.
Effective 9 March through late-April, the Vietnamese government reduced most-favored-nation import taxes on unleaded gasoline and blending inputs such as naphtha and reformate from 10 percent to zero. Diesel, jet fuel, kerosene, and fuel oil tariffs dropped from seven percent to zero, while petrochemical inputs including xylenes and condensate fell from three percent.
The Vietnamese Ministry of Finance estimates the cuts will reduce state budget revenue by approximately VND 1.024 trillion (USD 39 million).
The measures follow a Middle East conflict that erupted on 28 February, stoking fears of a blockade of the Strait of Hormuz, the critical chokepoint between Oman and Iran through which over 20 million barrels of oil transit daily, representing between 20 and 30 percent of global seaborne petroleum. A closure would hit Asian refineries particularly hard.
The fallout is already spreading across the region.
China, Japan, and Thailand have restricted fuel exports, narrowing Vietnam’s import options at a time when alternative supplies are becoming scarcer and more expensive.
At home, panic buying has taken hold in Hanoi and northern provinces. The Ministry of Industry and Trade has urged citizens not to stockpile and to report petrol stations found suspending sales or charging above listed prices. Businesses are being encouraged to adopt work-from-home arrangements and optimize logistics, while the public is advised to carpool and prioritize public transport.
To bolster supply, the government has mobilized approximately four million barrels of oil from partners. Prime Minister Pham Minh Chinh held a direct call with Kuwait’s Prime Minister Sheikh Ahmed Abdullah Al-Ahmad Al-Sabah, Kuwait holds the world’s seventh-largest oil reserves, requesting that crude supplies to Vietnam continue uninterrupted.
Should market conditions deteriorate further, the government may extend the tariff relief beyond 30 April.
