Việt Nam rolls out urgent measures to safeguard domestic energy security amid escalating Middle East tensions

Việt Nam rolls out urgent measures to safeguard domestic energy security amid escalating Middle East tensions

With Resolution 36 issued on March 6, the Government aims to ensure stable petroleum supply, maintain flexible fuel price management and optimise the use of domestic gas resources to prevent fuel shortages.

A petrol station in Hà Nội. The Vietnamese Government has rolled out a series of urgent measures safeguard domestic energy security and prevent fuel disruptions as tensions escalate in the Middle East. — VNA/VNS Photo Trần Việt

The Vietnamese Government has rolled out a series of urgent measures to safeguard domestic energy security and prevent fuel disruptions as tensions escalate in the Middle East.

With Resolution 36 issued on March 6, the Government aims to ensure stable petroleum supply, maintain flexible fuel price management and optimise the use of domestic gas resources to prevent fuel shortages.

Specifically, the Government requires oil contractors to prioritise selling crude oil or condensate which have not yet been committed for exports to the domestic market if suitable for domestic refinery processing.

The Ministry of Finance has been authorised to direct Vietnam National Industry - Energy Group (PetroVietnam) to decide specific implementation measures, ensuring flexibility and compliance with the law under crisis conditions.

At the same time, PVN and its subsidiaries operating in crude oil processing and trading, including Bình Sơn Refining and Petrochemical and PetroVietnam Oil Corporation (PVOIL), are permitted to buy, sell, import and export crude oil and feedstock used in petroleum production.

The Ministry of Industry and Trade and the Ministry of Finance were tasked with closely reviewing domestic fuel supply and taking proactive steps to ensure sufficient petroleum for production, business and consumer demand.

Flexible fuel pricing mechanism activated

To respond more quickly to market volatility, the Government has also approved changes to the mechanism for adjusting domestic fuel prices.

Under the new approach, if the base price of widely used petroleum products rises by 7 per cent or more compared with the previous reference price, authorities will implement a price adjustment immediately after the increase is recorded rather than waiting for the regular weekly review cycle.

If the increase is below 7 per cent, fuel prices will continue to be reviewed and adjusted on the regular weekly schedule every Thursday in accordance with Decree 80/2023/NĐ-CP.

Revise import tariffs

The Government has also asked the Ministry of Finance to urgently draft amendments to most-favoured-nation (MFN) import tariff rates on several petroleum products. The proposal is to be submitted to the Government on March 7 under an expedited procedure.

In case domestic refineries struggle to meet contracted fuel supply volumes and imports, the Ministry of Industry and Trade has been tasked with directing distributors to draw on commercial petroleum reserves or release fuel from national strategic reserves to stabilise supply.

The Government stressed that the measures must be implemented with transparency and strict oversight to prevent misconduct or policy abuse.

Prioritising domestic gas and accelerating biofuel transition

To reduce the risk of fuel shortages, the Ministry of Industry and Trade will coordinate with Vietnam Electricity (EVN) and Petrovietnam to prioritise the use of domestically produced gas for power generation, replacing part of the imported liquefied natural gas (LNG) supply.

In the longer term, the Ministry of Industry and Trade and the Ministry of Science and Technology were asked to urgently review technical standards and regulatory conditions to facilitate an earlier rollout of the biofuel transition roadmap in order to reduce reliance on fossil gasoline.

The Government also urged efforts to strengthen energy-saving and increase energy efficiency. 

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