Regarding VAT, gasoline, oil, and aviation fuel are exempt from declaration and payment of VAT, but input VAT is still deductible according to regulations. Notably, the special consumption tax rate for all types of gasoline is also applied at 0%.

Business implications: From cost pressure to supply chain risk

Logistics and Transportation cost escalation

Rising diesel prices are significantly increasing transportation costs, especially in Vietnam where road freight dominates. Logistics providers are increasingly applying fuel surcharges, leading to higher overall distribution expenses.

As observed in previous global disruptions, fuel price increases tend to amplify across the entire logistics chain, affecting not only direct transport costs but also routing decisions and delivery timelines.

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Impact on export-oriented industries

Export-driven sectors such as agro-processing and seafood are particularly exposed, as they rely heavily on cold chain logistics and international shipping. In this context, rising fuel costs can have a more immediate and substantial impact than demand fluctuations, directly affecting profit margins and competitiveness.

This highlights the growing importance of cost control and supply chain optimization for Vietnamese exporters.

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Inflationary pressure and consumer market effects

Rising fuel prices act as a key transmission channel for inflation in Vietnam, as higher energy costs quickly feed into transportation, production, and retail prices. As observed in previous global shocks, increases in oil prices can push inflation toward higher levels in the short term, creating broader cost pressures across the economy.

Beyond direct impacts, higher logistics and distribution costs are gradually passed on to consumers, particularly in essential goods such as food and daily necessities. This erodes purchasing power and may lead to more cautious spending behavior, potentially slowing demand recovery if fuel price volatility persists.

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Study the effect of US-Iran relations on Vietnam market

Navigating market change with B&Company

In a market environment shaped by rapid cost fluctuations and external shocks, timely insights are critical for effective decision-making. B&Company, the first Japanese company specializing in market research in Vietnam, supports businesses in monitoring market developments, assessing cost impacts, and adapting strategies to changing conditions. Through local expertise and data analysis, we help clients navigate uncertainty and identify sustainable growth opportunities in Vietnam’s evolving business landscape.

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