Vietnam’s proposed fuel-market rules could strengthen Petrolimex and PVOIL

Vietnam proposes a more market-based fuel regime

Vietnam’s proposed overhaul of petroleum trading rules could accelerate consolidation in the domestic fuel market and reinforce the position of its two largest suppliers, Petrolimex and PVOIL. The draft decree combines greater commercial freedom over wholesale and retail prices with substantially tighter requirements for companies seeking recognition as principal petroleum wholesalers.

The Ministry of Industry and Trade published the proposal after nearly two years of preparation and four rounds of broad consultation with businesses, according to CafeBiz. It is intended to replace Decree 80/2023/ND-CP. KBSV Research based its assessment on Draft 12.2 dated July 20, 2026, and cautioned that the final provisions could change before adoption.

Under the proposal, principal wholesalers and distributors would set wholesale and retail prices using the new framework, replacing the current government-determined base-price mechanism. Regulators would supervise price calculation and publication. Standard business costs would be adjusted annually in line with the consumer price index and reviewed every three years.

The existing fixed standard profit of 300 dong per liter would no longer be prescribed. Companies could determine profit margins based on their actual operations. KBSV said this flexibility could allow suppliers to reflect cost movements more accurately, after Petrolimex and PVOIL experienced declining margins during 2014–2025 as actual expenses rose without corresponding adjustments to standard costs and profit.

Storage, experience and retail requirements rise

The greater pricing freedom is paired with higher entry barriers for principal wholesalers. Current rules allow qualifying storage facilities to be owned, jointly owned or leased. The draft would require a principal wholesaler to own tanks with total capacity of at least 15,000 cubic meters, a measure KBSV views as an attempt to prevent companies from using nominal or “virtual” storage leases to obtain licenses.

An applicant would also need at least 36 consecutive months of experience as a petroleum distributor. Its managed network would have to include at least 10 company-owned retail stations and 40 stations operated by distributors. Storage tanks, distribution systems and other facilities used to qualify one principal wholesaler could not simultaneously support another company’s application.

Requirements for distributors, by contrast, would be simplified. CafeBiz reported that the current combination of at least five retail stations, 10 agency stations, 2,000 cubic meters of storage and transport equipment would be replaced by a requirement for at least one certified outlet, owned or leased. KBSV expects the resulting structure to reduce intermediary layers and allow agency, franchise and independent models. Independent traders could buy from multiple suppliers and set their own retail prices, while agents and franchisees would remain tied to a principal wholesaler’s designated prices.

Market concentration may increase

Vietnam had 26 principal petroleum wholesalers in 2025, according to figures compiled by KBSV. Petrolimex held about 47% of the market and PVOIL about 20%, giving the two companies a combined share of approximately 67%. Thanh Le held 8% and Saigon Petrol about 6%.

Consolidation was already under way before the latest proposal. The number of petroleum distributors rose after Decree 83/2014/ND-CP eased entry requirements, reaching a peak of about 500 companies in 2022. It subsequently fell as authorities increased inspections, tightened operating conditions and revoked licenses.

KBSV expects the new qualification rules to place further pressure on smaller or financially weaker principal wholesalers. Fewer competitors could strengthen the bargaining power of Petrolimex and PVOIL in dealings with retail networks, reduce the need for high dealer discounts and improve profit per liter. The outcome will nevertheless depend on the decree’s final text and its practical enforcement.

KBSV cited India as a relevant precedent: margins at petroleum retailers tended to improve after the country moved toward market pricing in 2014, although they also became more volatile across market cycles. The research firm said India’s approach attracted more private capital while large state-owned companies retained strong positions. For Vietnam, the proposed balance between price flexibility and higher infrastructure thresholds could likewise encourage investment, but it may also leave market access increasingly dependent on scale and ownership of physical assets.