Vietnam experienced a significant drop in gasoline prices, falling 19% on Friday after the government removed environmental protection tax, value-added tax, and special consumption tax on gasoline, diesel, and aviation fuel. This policy aims to counteract soaring energy prices driven by the ongoing Middle East crisis, which has kept fuel costs elevated. Despite the reduction, the price per liter remains 21% higher than before the United States and Israel attacked Iran, underscoring the persistent impact of geopolitical tensions on Vietnam's energy market. Consumers in Hanoi have been seen queuing for fuel, reflecting heightened urgency and volatility in supply. The Vietnamese government is also seeking oil aid from Japan and financial support from the Asian Development Bank to stabilize fuel markets and mitigate war-related shocks [1].
Meanwhile, Sri Lanka is grappling with rising global oil prices amid escalating U.S.-Iran tensions. Drawing on lessons from its 2022 economic crisis, Sri Lanka has reintroduced fuel rationing to manage limited foreign reserves and prevent long queues at fuel stations. The country has implemented a QR code system to improve fuel distribution, but policymakers remain concerned that a prolonged conflict could worsen foreign exchange controls and further strain the fragile economy. The increased cost of oil imports is expected to pressure the Sri Lankan rupee and raise living costs. Market analysts warn that continued instability may force Sri Lanka to tighten forex controls, risking shortages of essential goods and undermining economic recovery. The government is urging fuel conservation and seeking alternative energy sources, though options are limited due to fiscal constraints and slow economic reforms. The Central Bank of Sri Lanka is monitoring the rupee and may adjust monetary policy to buffer shocks from the oil market. Authorities have not announced major market interventions but are prepared to act if the forex situation deteriorates [2].
Both Vietnam and Sri Lanka are taking urgent measures to address the economic fallout from the Middle East crisis, with Vietnam focusing on tax cuts and external aid, and Sri Lanka relying on rationing and technology to manage supply. The sentiment across both markets is cautious, with governments prioritizing relief for consumers and essential services amid ongoing volatility [1][2].
CONCLUSION
Vietnam and Sri Lanka are responding to the Middle East-driven energy crisis with decisive policy actions—Vietnam through tax cuts and external support, Sri Lanka via rationing and technological solutions. Despite these efforts, both countries face continued challenges from elevated oil prices and supply disruptions, keeping market sentiment cautious and the impact high. Authorities remain vigilant and ready to intervene further should conditions worsen.