The Ministry of Industry and Trade is drafting a decree which would raise the current cap of 20 percent to 34 percent amidst rising interest from foreign investors.

The state-owned fuel distributor Petrolimex has been seeking to increase foreign ownership in the company. It has already sold an 8 percent stake to Japan’s JX Nippon Oil & Energy, and 0.175 percent to other foreign investors.

Petrolimex Chairman Pham Van Thanh noted that many foreign companies are interested in investing in the company, but the state needs to lower its 75.87 percent stake to 51.05 percent to give them more room.

In the petrol retail sector, Japan’s Idemitsu Q8 is the only foreign-owned petrol chain in Vietnam with four outlets since entering the market in 2017. It targets to have 10 by 2020.

With less than a handful of foreign names present, Vietnam’s petrol industry remains strictly controlled by the state to ensure power security.

"Although the draft allows foreign investors to participate in the petrol market, especially in retail, it must still in principle be governed by the state," Tran Duy Dong, head of the domestic markets department under the trade ministry, told local media.

Another proposal in the draft is changing the way petrol retail costs are calculated to account for the rising share of domestic petrol.

Dong said that five years ago Vietnam had to import 70 percent of petrol for consumption, but this ratio has changed to 70-75 percent locally-produced fuel now, thanks to the country’s two refineries – Dung Quat and Nghi Son.

This means the nation needs to apply two formulas, one for imported petrol and another for domestically refined one, in calculating the retail price, he said.

Vietnam imports most of its petrol from South Korea, Malaysia, Singapore, and China. In the first 11 months, imports volume fell 17.19 percent year-on-year to 8.86 million tonnes, according to Vietnam Customs.