Ho Chi Minh City hums with millions of motorbikes, a vital artery for its burgeoning gig economy. Yet, beneath the ceaseless roar of two-wheeled traffic, a profound distress festers: the escalating Vietnam fuel crisis. E-hailing driver Nguyen, a diligent worker navigating the city’s labyrinthine streets, recently found half his daily earnings evaporated at the petrol pump. This stark reality underscores a nationwide struggle, as geopolitical tremors in the Middle East send brutal shockwaves across Southeast Asia.
“I drove for around seven or eight hours, making around 240,000 Vietnamese dong [$9.11], and then I paid 120,000 Vietnamese dong [$4.56] on petrol,” Nguyen, a motorcyclist connecting with passengers via the locally developed super-app Be, told Al Jazeera. He asked not to be identified by his real name, his voice heavy with despair. “I can’t survive with this amount of money in the city.”
Indeed, in Vietnam, the far-reaching ripples of the US-Israel war on Iran are hitting countless gig workers with devastating force. The Southeast Asian nation typically sources approximately 80 percent of its crude oil from Kuwait. However, those crucial shipments have now dried up amidst Iran’s effective blockade of the Strait of Hormuz, directly fueling an unprecedented surge in domestic prices.
Diesel prices have more than doubled. Meanwhile, petrol prices have climbed almost 30 percent, transforming every journey from point A to point B into an increasingly expensive proposition, particularly in sprawling urban centers like Ho Chi Minh City, home to over 7 million motorcycles. “Because the petrol price is so high, so many drivers are turning off the app, going home, and just not working,” Nguyen lamented. “After today, I will turn off the app and stop working for a few days to see if the price goes down or if the government is helping in any way.”
The Human Cost of the Vietnam Fuel Crisis
Vietnam’s government has, in response, rolled out a series of emergency measures aimed at cushioning the blow for its citizens. Prime Minister Pham Minh Chinh announced last month a temporary suspension of the environmental tax on diesel, petrol, and aviation fuel until April 15, a critical move intended to stabilize prices and quell growing public discontent.
Nguyen Khac Giang, a Vietnamese-born visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore, emphasized the urgency of these actions. “There are a lot of complaints and frustrations about rising living costs because gas prices are everything in Vietnam,” Giang explained to Al Jazeera. “It’s not only necessary in terms of making the population feel relief about the rise of gas prices, but at the same time, it will keep macroeconomic stability intact, given the turbulence outside Vietnam.”
Despite Hanoi’s sacrifice of an estimated $273 million in revenue via this tax cut, signs of severe economic strain are mounting across the economy. Public transportation systems are stretched beyond capacity in major cities, and domestic carriers such as Vietnam Airlines and Vietjet Air have dramatically slashed flights. Giang underscored Vietnam’s precarious position: “As a very, very open economy, Vietnam is super vulnerable to international shocks.”
Gig workers, in particular, have found themselves exceptionally exposed to this volatility, facing the double whammy of heavy fuel consumption coupled with minimal labor protections. “Their income is changeable due to factors beyond their control,” noted Do Hai Ha, a research fellow at the University of Melbourne specializing in Vietnam’s gig platforms. “They have no chance to negotiate with the platforms.” Many drivers, she added, have no recourse but to work longer hours, being “excluded from labor protection, so there’s no guarantee in terms of minimum wages or overtime pay.”
Even established companies are feeling the profound crunch. Anh Dao, who diligently collects fares on Ho Chi Minh City’s bus route 13, revealed that her bus operator is bleeding money due to the spiraling diesel prices, even after reluctantly raising ticket prices by 3,000 Vietnamese dong ($0.11). “As we already signed the contract, we cannot just stop running the buses,” Ahn stated.
For a fisherman in the coastal region of Binh Thuan, situated roughly 200km (124 miles) from Ho Chi Minh City, the relentless climb of fuel costs has spurred a frantic search for cheaper options to power his humble basket boat. “Now that fuel prices are rising, it’s having a big impact,” the unnamed fisherman told Al Jazeera, noting how middlemen are citing weak demand to justify offering lower prices for his catch. “What I was usually able to sell for 800,000 Vietnamese dong [$30] is now only selling for 650,000 Vietnamese dong [$24].”
Beyond the immediate economic fallout, this crisis reshapes daily life for low-income families. Uyen Pham, a communications manager for the Saigon Children’s Charity, observed firsthand the profound strain during a recent trip to the Mekong Delta. “Several parents noted that the cost of bottled cooking gas has nearly doubled,” Pham reported. Many families now rely almost entirely on wood for cooking, meticulously cutting every possible expense. For parents in remote areas, rising commuting costs mean less frequent visits home, tragically keeping them apart from their children.
The current volatility has intensified Hanoi’s long-term focus on achieving greater energy independence, according to Giang. “The longer-term question this crisis has enacted is a very important question about the strategic autonomy of Vietnam in terms of energy dependencies, especially when we are a net importer of oil,” he affirmed. Policymakers must “more aggressively accelerate Vietnam’s energy independence by building more refineries, because now we only have two refineries, which is not enough for the Vietnamese market.”
For a deeper understanding of these interconnected global economic trends, further research is invaluable. With long-term solutions years away, authorities are scrambling for immediate fixes. Late last month, Prime Minister Chinh and a delegation from the Ministry of Industry and Trade visited the Nghi Son Refinery and Petrochemical Complex, the country’s largest refinery, in Thanh Hoa. Officials indicated the refinery, supplying about 40 percent of Vietnam’s petrol needs, urgently requires alternative crude sources as current supplies are projected to run out by May’s end.
The geopolitical strife also appears to be reshaping domestic investment strategies. Vingroup, Vietnam’s largest conglomerate, recently informed authorities of its intention to halt plans for the country’s largest liquefied gas-fired power plant. Instead, the company plans to redirect funds towards a renewable energy project, citing “the significant risk of high fuel prices for LNG power projects” due to the ongoing conflict, according to reports from Bloomberg and Reuters.
In the meantime, Duy, a cafe worker tucked behind a Ho Chi Minh City petrol station, expresses a sliver of relief following the government’s fuel tax cut, which authorities projected would reduce petrol prices by about one-quarter and diesel prices by about 5 percent. “I usually pay 100,000 Vietnamese dong [$3.80] a week on gas, but at the peak of the high prices a few days ago, it was almost double that,” she said. “It affected my income.” While a minor reprieve, the shadow of the Vietnam fuel crisis looms large, forcing millions to reconsider their livelihoods and daily existence.
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