Vietnam Petroleum Decree Shift: PLX, OIL Gain as Market Pricing Looms

Overview

Vietnam’s Ministry of Industry and Trade has published a draft decree on petroleum trading to replace Decree 80/2023/NĐ-CP, aiming to shift pricing from state-determined base prices to a market-based mechanism with state oversight. According to KB Vietnam Securities (KBSV), this change could restructure the domestic fuel market, benefiting large firms like Petrolimex (PLX) and PVOIL (OIL), which together control 67% of the market share.

Key Facts

• Draft decree published by Ministry of Industry and Trade after nearly 2 years and 4 rounds of public consultation.
• Proposed shift from state-set base prices to market-based pricing with state supervision.
• Fixed profit margin of 300 VND/liter under current regulations would be removed.
• Standard business costs to be announced and adjusted annually based on CPI, with reviews every 3 years.
• PLX and OIL hold a combined 67% market share in Vietnam’s fuel market.
• KBSV notes profit margins for fuel firms like PLX and OIL declined from 2014 to 2025 due to rising actual costs.
• India’s 2014 shift to market pricing led to improved margins but higher cyclical volatility.

What Happened

The Ministry of Industry and Trade has released a draft decree on petroleum trading, which is now being submitted to the government. The draft introduces significant changes to pricing mechanisms, distribution systems, and market entry conditions. KBSV’s analysis highlights that the new pricing framework would give fuel wholesalers and distributors more autonomy in setting wholesale and retail prices based on a pricing formula, with state agencies moving to a supervisory role.

The draft also eliminates the fixed 300 VND/liter profit margin, replacing it with annually adjusted standard business costs tied to CPI. KBSV argues this will allow companies to better reflect actual cost fluctuations in their selling prices, potentially improving profitability. The brokerage draws parallels to India’s 2014 deregulation, which saw improved margins for fuel retailers despite increased volatility.

Market Context

PLX, listed on HOSE, closed at 38,200 VND on August 20, 2026, while OIL, also on HOSE, closed at 13,300 VND. The petroleum sector has faced margin compression over the past decade due to rigid pricing regulations. The draft decree, if enacted, could be a catalyst for re-rating, as it addresses the structural profitability issue. The broader Vietnamese market has been volatile, but policy-driven reforms in key sectors often attract investor attention.

Strategic Significance

For long-term investors, the draft decree represents a potential structural shift in Vietnam’s fuel retail industry. Market-based pricing would allow PLX and OIL to optimize margins, leveraging their scale and distribution networks. The removal of fixed profit caps could lead to more efficient pricing and better returns on capital. Additionally, stricter requirements for market entry may accelerate consolidation, strengthening the dominance of incumbents. This aligns with the government’s broader goal of enhancing market efficiency while maintaining regulatory oversight.

What to Watch

• Final approval and effective date of the new decree by the government.
• Quarterly earnings reports from PLX and OIL for margin trends post-implementation.
• Any adjustments to standard business costs and their impact on profitability.
• Market entry of new private players or foreign investors in response to deregulation.
• Regulatory announcements on pricing formula details and supervision mechanisms.