Energy costs create pressure on multiple fronts

Global energy markets have experienced sharp fluctuations since the beginning of 2026. According to the World Bank, Brent crude prices rose around 20% in the first two months of the year, reaching $72 a barrel at the end of February.

Following the outbreak of conflict in the Middle East, oil prices surged, at times exceeding $100 a barrel in March. By September, the global energy price index had risen 25.7% from the previous month, with crude oil prices up 21.2% and natural gas prices rising 15.3%. The developments highlight that cost pressures stem not only from elevated prices but also from unpredictable market swings.

At the Ministry of Industry and Trade’s press briefing for the third quarter, Bui Huy Son, head of its planning and finance department, said geopolitical conflict in the Middle East had driven oil prices higher in September, pushing up fuel and logistics costs. Demand for inputs to support production, capacity expansion and export orders had also increased requirements for electricity, fuel and machinery.

For businesses, the challenge is that costs can change rapidly, while production plans, transportation contracts and delivery commitments are often established well in advance. When expenses exceed expectations, companies must decide whether to raise selling prices, accept lower margins to retain customers or scale back operations to limit losses.

A business sentiment survey of manufacturing and processing companies conducted by the National Statistics Office found significant pressure from input costs. In the third quarter of 2026, 53.3% of businesses said production costs per unit had increased from the previous quarter, while 50.1% expected costs to rise further in the fourth quarter.

Notably, 40.7% called on the government to stabilize raw material and energy prices. This indicates that input-cost pressures remain significant, although changes in production costs depend on multiple factors, not energy prices alone.

Price pressures also pose challenges for economic management. Vietnam’s consumer price index (CPI) rose 0.62% in September 2026 from the previous month and 5.08% from a year earlier, while average inflation in the first nine months reached 4.52%.

Domestic fuel price adjustments in line with global markets were among the factors contributing to September’s CPI increase. Containing the knock-on effects of higher energy prices is therefore important not only for business costs but also for the overall price level and consumer purchasing power.

In response, the government and relevant ministries have introduced measures to manage price volatility and secure supplies. Resolution No. 43/2026/NQ-CP, dated September 30, 2026, extended until December 31, 2026, certain preferential import tax, environmental protection tax and value-added tax policies covering fuels and some inputs used in fuel and aviation fuel production.

At the Ministry of Finance’s regular third-quarter press briefing, Deputy Minister Nguyen Duc Chi highlighted the need for coordinated policy management, secure supplies of essential goods and the appropriate use of tax instruments.

Price regulators have also stressed the need for transparent cost structures, explanations for price increases and stronger inspections to prevent speculation and profiteering. The Ministry of Industry and Trade said fuel supplies were being secured and the power system was operating safely and reliably, while authorities continued to monitor oil prices and transportation routes.

These measures help stabilize markets and reduce supply risks. However, if price volatility persists, businesses will still need to adjust their operations proactively, while policymakers must review their measures in line with actual conditions to ease cost pressures and strengthen energy self-sufficiency.

Cutting costs to retain prices and customers

For logistics companies, energy price volatility directly affects their ability to fulfill contracts. Tina Le, a representative of Marble WW, a company involved in logistics and exports to Europe and the United States, said transportation costs had risen sharply for both sea freight and domestic shipping, making it difficult for businesses to forecast expenses and provide stable quotations.

According to information provided by the company, bunker adjustment factor (BAF) surcharges for full-container-load shipments account for around 20-30% of total costs. Prices of very low sulphur fuel oil (VLSFO) have risen more than 70%, while the introduction of emergency fuel surcharges (EFS) by many shipping lines has put further pressure on ocean freight rates. Warehousing, door-to-door delivery and domestic transportation costs have also fluctuated, complicating cost calculations.

While logistics contracts are signed in advance, fuel surcharges can change continuously. According to Marble WW’s representative, this has reduced the company’s profit margins by 60-70% and created a need to renegotiate contracts.

“Raise prices and we lose customers; keep prices unchanged and we lose money,” Tina Le said.

Higher costs are also affecting delivery decisions. Some factories have opted to hold inventory or delay transportation, exports and imports because of uncertainty over logistics expenses. High freight rates, coupled with a lack of corresponding improvement in cargo volumes, have made the outlook for fourth-quarter operations difficult to predict. Energy price volatility can therefore have effects beyond transportation costs, disrupting business plans across the import-export sector.

In manufacturing, Dang Van Nga, chairman of the Quynh Hop Commune Association of Small and Medium-sized Enterprises in Nghe An province, said fuel prices directly affected quarrying, loading and excavation, raw material transportation and finished-product deliveries. For industrial stone powder, a bulky product, higher transportation costs add pressure to production expenses and competitiveness.

With many orders already signed at fixed prices, companies cannot immediately adjust selling prices to reflect higher fuel costs. To honor commitments to customers, they may have to absorb additional expenses through lower profits. Businesses are therefore reviewing fuel consumption norms, maintaining equipment, organizing production more efficiently, and reducing waste.

In transportation, optimizing routes, consolidating trips, reducing empty runs and planning delivery schedules in advance can help cut costs. Rather than raising prices immediately, businesses are prioritizing internal cost reductions while maintaining quality and delivery schedules. If price adjustments become unavoidable, Nga said his company would communicate transparently and introduce changes gradually to balance the interests of both parties.

For manufacturers and exporters, maintaining selling prices is particularly important when contracts have already been signed and competition limits their ability to pass on higher costs. Mai Thi Y Nhi, director of My Phuong Food Co., Ltd., said the company had a nationwide distribution network and exported to more than 20 countries. Fuel prices, particularly diesel, were now considerably higher than a year earlier. However, export logistics costs had already risen before the latest bout of volatility, so the company had not recorded a further increase in that expense during the current period.

The company is concerned that sustained high fuel prices will increase the cost of transporting raw materials and goods domestically, putting pressure on production costs. Meanwhile, raising export prices is difficult because of existing contracts and competitive conditions.

“In the immediate term, businesses must proactively control costs and reorganize production in an effort to maintain selling prices and honor commitments to customers,” Nhi said.

The impact of fuel prices is even more direct in the transportation sector, where costs can be measured for each trip. Nguyen Van Thao, director of Truong Thinh Transport Trading Co., Ltd. in Gia Lai province, said the company had to recalculate vehicle deployment plans and reorganize operations as fuel prices became increasingly volatile.

Truong Thinh has reduced the number of trips, limited empty runs, reviewed operating costs and adjusted staffing arrangements to ease financial pressure. “Previously, the company could organize 10 trips a day, but now it has to cut that to around four or five,” Thao said.

Reducing trips allows the company to adjust operations to actual costs, but also illustrates the limits of short-term measures. If fuel prices continue to exert pressure, businesses will find it difficult to maintain their previous transportation frequency unless each trip remains economically viable.

The four cases show how companies in different industries are responding: logistics providers are renegotiating contracts and managing surcharges; manufacturers are reducing waste and reorganizing operations; exporters are seeking to maintain prices and delivery commitments; and transport companies are adjusting operating frequency. Their common priority is to control costs where possible while weighing the effects of price increases or reduced operations on customers and business performance.

However, businesses have limited room to maneuver on their own. The chairman of the Quynh Hop Commune Association of Small and Medium-sized Enterprises has called for timely measures to ease fuel and transportation cost pressures, improve access to financing at appropriate interest rates, and further simplify administrative procedures. Alongside their own efforts, businesses need a more stable cost environment and more predictable operating conditions to sustain activity.

From immediate measures to managing volatility

Speaking to The Investor, Can Van Luc, chief economist at BIDV, said measures proposed in March 2026 remained relevant as energy price volatility persisted. He said short-term steps to ease cost pressures should be combined with longer-term measures to improve energy self-sufficiency and reduce exposure to global market risks.

In the immediate term, Luc recommended considering cuts to taxes and fees related to gasoline products and using the price stabilization fund flexibly to limit excessive price swings. He also called for timely support for businesses directly affected by higher fuel and transportation costs, secure fuel supplies, diversified import sources and stronger inspections to prevent speculation and hoarding.

Luc also stressed the need to coordinate monetary and fiscal policies to stabilize the macroeconomy and strike a balance between exchange rates and interest rates. Higher fuel costs could compound other input-cost pressures, so business support should be part of a broader policy framework that both limits the impact of energy prices and maintains stable conditions for production and business activity.

In the longer term, he proposed diversifying supply sources, increasing strategic energy reserves, accelerating implementation of the revised Power Development Plan VIII and completing the legal framework to strengthen energy self-sufficiency. Developing financial markets, including the stock market and commodity trading markets, could also provide additional tools for hedging against price risks.

These recommendations indicate that the response needs to go beyond price management, supply security and tax measures. Building reserves, diversifying imports and developing risk management instruments are also necessary to help businesses better prepare for market volatility.

At the company level, cutting costs and adjusting plans are necessary first steps, but long-term resilience also depends on management capabilities, operational coordination and the speed with which businesses respond to changes.

Petrovietnam offers an example of an approach that combines responses to market volatility with management and operational changes, according to Tran Quang Dung, standing deputy chief of the group’s Party Committee. He said global energy markets had been complicated during the first nine months of 2026, with conflicts and geopolitical instability affecting markets and energy security.

Against this backdrop, Petrovietnam implemented response measures to maintain operations and achieved its revenue, profit and state budget contribution targets three months ahead of schedule. The group recorded growth of around 40% in the first nine months of 2026.

According to Dung, about 17 percentage points of that growth came from oil prices, while 23 percentage points came from business and production efficiency and internal drivers, including management, business expansion, innovation, the application of science and technology, and employee efforts.

This breakdown shows that performance depends not only on market conditions but also on management and the ability to adapt. Petrovietnam emphasizes building a culture of managing volatility, with a focus on digital culture, coordination and the ability to respond quickly to changes in the business environment.

At Binh Son Refining and Petrochemical's refinery, operations at times reached 118-125% of designed capacity while maintaining safety, stability and efficiency. According to Petrovietnam's leadership, this performance reflected technological capabilities, professionalism, risk control and coordination between departments, rather than an attempt to maximize output at any cost.

From transport companies cutting trips and optimizing routes to a large energy group implementing volatility management on a broader scale, the common theme is making adaptability part of routine operations. Short-term measures help contain the impact of rising costs, while stronger management capabilities help businesses sustain performance as market conditions change.

Energy price volatility presents two parallel requirements: businesses need to control costs proactively and optimize operations, while regulators must continue to secure supplies, review measures to ease input-cost pressures and strengthen energy self-sufficiency.

Coordination between policy management and business adaptation will give companies more room to maintain selling prices, retain customers, and protect their competitiveness in an unpredictable business environment.