Nhan Dan Newspaper spoke with Professor Ngo Tri Long of the Viet Nam Financial Consultancy Association about the issue.

Q: What is the significance of the Government’s decision to cut the special consumption tax on petrol to 0% and its instruction to the Viet Nam Electricity Group (EVN) to consider lowering retail electricity prices at this point?

A: From November 1, 2026, the average retail electricity price has been cut by 2%, from 2,204.07 VND to 2,159.9037 VND per kWh. Domestic retail petrol prices have also fallen by 1,800 VND per litre as a result of cutting the special consumption tax rate on all petrol products to 0%.

These two policies come at a time when living costs remain under considerable pressure, making it imperative to protect purchasing power and stabilise livelihoods.

According to the National Statistics Office, the consumer price index (CPI) rose by an average of 4.52% in the first nine months of 2026, while core inflation rose by 4.26%.

Notably, prices in the housing, electricity, water, fuel and construction materials category rose by 6.68%; food and catering services by 4.72%; and transport by 6.06%. Household electricity prices alone rose by 4.35%. These figures show that price pressures are not merely a statistical matter but are directly affecting the daily spending of households.

For many people, particularly low-income workers, factory workers, pensioners, poor households and large families, electricity and petrol are expenses that are hard to cut. When incomes, whether wages, pensions or other sources, fail to keep pace with rising living costs, every increase in essential spending reduces households’ ability to meet other needs, such as food, education and healthcare.

Therefore, reducing electricity prices now carries economic significance and brings practical social benefits. The savings for individual households may be modest, but the policy helps ease pressure on household spending, particularly when combined with the cut in petrol costs.

Social welfare policies are not limited to direct budget-funded assistance for disadvantaged groups. Controlling the prices of essential goods and limiting the erosion of the currency’s purchasing power also protect livelihoods broadly.

Q: How will these policies affect people’s livelihoods?

A: Inflation affects different population groups unevenly. Higher-income earners are generally better able to adjust their spending or draw on savings to cope. By contrast, low-income households must devote most of their earnings to essential needs, making them more vulnerable to price increases.

Containing inflation is therefore not simply about keeping a macroeconomic indicator stable. It is also about protecting real incomes and advancing social progress and equity.

Notably, existing policies also provide poor households with electricity bill assistance equivalent to 30 kWh per month. Eligible households covered by social welfare policies receive support under the same mechanism.

Combining electricity pricing policies with targeted assistance reflects two approaches: easing the overall burden on consumers while giving greater support to vulnerable groups.

However, the 2% reduction applies to the average electricity price and does not mean that every household’s bill will fall by exactly that percentage. It is therefore essential to publish the new tariff schedule and ensure that tenants, workers in industrial parks and households buying electricity through intermediaries are charged the prescribed rates.

A policy can serve social welfare objectives only when its benefits reach the people who need them, particularly those under the greatest pressure from rising living costs.

Q: Electricity and fuel are major input costs for businesses. How will the cut in average electricity prices and the lower special consumption tax on petrol affect business operations now?

A: Beyond their impact on livelihoods, the cuts in electricity prices and the petrol tax are also significant for production and business.

According to the National Statistics Office, GDP grew by 9.01% in the first nine months of 2026, but the input price index for raw materials, fuels and other production materials rose by 5.12%, while the producer price index for industrial products rose by 4.37%. This indicates that although economic growth remains strong, businesses face considerable input cost pressure.

For electricity-intensive industries such as steel, cement, chemicals, textiles, garments and food processing, lower electricity prices can help reduce costs and improve competitiveness.

For small and medium-sized enterprises, production facilities and household businesses, lower energy costs also make it easier to maintain operations and stabilise employment and workers’ incomes.

At the same time, cutting the special consumption tax on petrol to 0% lowers fuel costs for businesses. Particularly noteworthy, however, is the combined effect of the two policies.

Electricity is used in almost every production process, while petrol is essential for transport and many business and distribution activities. When energy costs fall, businesses are better positioned to keep production costs stable, reducing the pressure to pass them on to consumers through higher prices for goods and services.

This approach directly addresses the cost-push factors behind inflation. At a time when the economy must both control prices and sustain growth, easing input cost pressures can serve both objectives without relying solely on measures to curb aggregate demand.

Q: How will the cuts in electricity prices and the petrol tax affect prices and economic activity?

A: I would not expect the prices of goods to fall immediately in proportion to the cuts in electricity prices or the petrol tax.

The actual impact will depend on cost structures, global fuel prices, the extent to which lower costs are passed through to selling prices and other market developments.

In particular, many freight transport businesses use diesel and therefore do not benefit directly from the cut in the special consumption tax on petrol.

Nevertheless, if implemented in a coordinated way, the two policies can still help contain price pressures in the final months of the year, particularly as production, distribution and consumption pick up ahead of the Lunar New Year.

Q: In your view, what is the most important signal about the Government’s approach to economic management in these adjustments to prices and taxes on essential goods?

A: From a macroeconomic perspective, the most significant aspect of these two decisions is the coordination of pricing and taxation policies to support growth, control inflation and safeguard social welfare.

First and foremost, this approach places people’s livelihoods and the resilience of businesses at the centre of economic management.

Electricity prices are not merely a financial matter for the power sector, just as petrol taxes are not simply a source of budget revenue. Both affect living costs, business competitiveness and overall price stability.

The reduction in electricity prices following EVN’s review and cost-cutting efforts highlights the need to improve management efficiency among providers of essential services. Where reasonable cost reductions can be achieved, the benefits should be passed on to consumers.

However, pricing policies must also preserve capacity for reinvestment and safeguard the quality of electricity supply and long-term energy security.

Furthermore, these policies underscore the need for close coordination among economic policy instruments.

Reducing input costs must go hand in hand with controlling inflation, stabilising interest rates and exchange rates, ensuring adequate supplies of goods and addressing difficulties facing producers. Only when policies reinforce one another can their benefits spread throughout the economy.

To ensure that these decisions deliver tangible results, it is necessary to strengthen transparency and public disclosure of electricity and petrol prices, monitor implementation and prevent speculation, hoarding and unreasonable price increases.

Particular attention must also be paid to vulnerable groups. Implementation of electricity bill assistance should be reviewed to ensure that no eligible households are overlooked and that tenants are not charged more than the prescribed rates.

In the longer term, social welfare cannot rely solely on temporary price cuts.

Pricing policies must be combined with measures to raise incomes, create stable jobs, expand access to essential services and strengthen households’ resilience to economic shocks.

The 2% cut in electricity prices and the lowering of the special consumption tax on petrol to 0% cannot solve every problem, but they are timely support measures at a time when households and businesses face considerable cost pressures.

More importantly, they send a clear message about economic management: growth must be accompanied by macroeconomic stability, inflation control and better livelihoods.

An economy can achieve truly sustainable development only when the benefits of growth translate into better jobs, higher incomes and a better quality of life.

The measure of success of these policies is not simply how much electricity prices have fallen or how far petrol taxes have been cut but how much pressure on household spending has been eased, how much businesses have saved, how effectively inflation has been controlled and to what extent social welfare has been safeguarded.

Putting people’s livelihoods at the centre, macroeconomic stability as the foundation and sustainable growth as the objective: these are the values that economic management should strive to achieve.

Thank you very much.