IBON Cites Vietnam on Fuel, While Rejecting the Very Capital That Built It
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| Foreign Trade University |
For Ibon Foundation, “the government should be able to control local oil prices and should not have to pass the burden of rising global prices on to consumers, as shown by other Southeast Asian countries with stronger state intervention.”It cited Vietnam, where oil prices are capped and the Price Stabilization Fund is tapped.
It should be crazy that IBON should mention Vietnam. However, IBON continues to promote a flawed view on Foreign Direct Investment. Months ago, IBON (via its executive director, Jose Enrique "Sonny" Africa) even gave a flawed proposal in Follow the Money. Sure, Vietnam has these policies on capping and a price stabilization fund.
What has allowed Vietnam to successfully use the Price Stabilization Fund? The answer was Doi Moi, which happened in December 1986. Doi Moi was when the Communist Party of Vietnam moved away from the Vietnam War mindset to a post-Vietnam War mindset. In fact, the changes affected all of the CPV's fronts, such as the Ho Chi Minh Communist Youth Union, the Vietnam Women's Union, the Vietnam General Confederation of Labour, the Vietnam National Union of Students, and its economic think tank, the Central Theoretical Council, which have all moved away from isolationism to prosperity. That was when Doi Moi was born.
Recent developments in Vietnam prove that IBON's model is obsolete. In fact, according to Legal 500, Vietnam has opened the door to a new wave of energy-related investments. Instead of saying, "The Communist Party of Vietnam should block out FDI." The opposite was true.
Could Vietnam’s new Decree 272 be the regulatory breakthrough international energy investors have been waiting for?
On 4 July 2026, the Government of Vietnam officially promulgated Decree No. 272/2026/ND-CP (”Decree 272”), establishing detailed mechanisms and policies for implementing Resolution No. 253/2025/QH15 on national energy development for the period 2026–2030.
Effective immediately until 31 December 2030, Decree 272 introduces a transparent and investor-friendly framework designed to accelerate approvals, reduce administrative burdens, and unlock significant opportunities for foreign investment in offshore wind and power grid infrastructure.
For international developers, financial institutions, EPC contractors, and energy investors, Decree 272 represents an important step towards a more predictable and efficient investment environment.
Since Vietnam puts economic policies under legislation rather than within the constitution, the December 31, 2030, limit may be renewed through legislation. In short, price caps and the like are something that goes with legislation and is examined to see if the price cap is actually reasonable or not. Any temporary subsidy is possible because Vietnam has more reserves than the Philippines.
If we go into past issues, Vietnam also boosted FDI in oil and gas exploration in 2011, according ot the Legal 500. This is again a far cry from all of IBON's rants on "stop relying on foreign capital" chismis:
Current proven and probable gas reserves in Vietnam do not seem to match the nation's rapidly growing gas demand. In order to fill the gap, the Ministry of Industry and Trade is studying the possibility of importing liquefied natural gas (LNG). Ultimately, LNG import may be necessary if there is no alternative, but it is an expensive option. Before resorting to LNG, the Vietnamese government should consider exploiting its own indigenous oil and gas reserves to the fullest extent possible. Conventional wisdom within the international oil and gas industry is that Vietnam's oil and gas reserves are currently under-exploited.
There is an upside regarding oil and gas reserves in Vietnam—especially in its offshore areas—if appropriate exploration activities are conducted systematically. The Vietnamese government needs to consider how it can encourage foreign oil and gas companies to participate in exploration activities in Vietnam. To promote oil and gas exploration and development activities, a comprehensive Petroleum Law was first enacted in 1993 and was subsequently amended in 2000 and again in 2008.
A model production sharing agreement was published in 2005. The law provides transparency and predictability of oil and gas activities in Vietnam; however, it has not provided enough incentive to attract many foreign investors to engage in risky oil and gas exploration activities. An easy solution is to provide more favorable fiscal terms to foreign investors under applicable production sharing agreements, but this course of action is not a likely scenario. Oil and gas reserves are valuable national assets and, therefore, fiscal terms may not be easily compromised.
The more practical approach is to assure oil and gas companies fair market price of discovered gas so that they have a reasonable expectation of gas commercialization. This is particularly important because the geology in Vietnam is considered heavily gas-prone. Approximately 90 percent of produced gas in Vietnam is used for power plants, and gas sales prices to power plants virtually determine the economics of Vietnam's gas development projects.
Since Vietnam doesn't have its economic laws within the constitution but only in legislation, the CPV can study, write down laws, and pass the laws as ongoing policies. Vietnam's key to FDI is to let them in but also give them reasonable restrictions via legislation when necessary. According to the Vietnam Law website, these are the current restrictions in Vietnam on gasoline, subject to change via legislation when necessary:
Conditions by Vietnamese law
For the petroleum business, foreign investors wishing to invest in this sector in Vietnam must comply with the following conditions:
- Foreign-invested economic organizations may not exercise export rights to oil and oils obtained from bitumen minerals, in crude form; crude oil; Gases, and other types. In case the foreign investor is an oil and gas contractor under the provisions of the Law on Oil and Gas, he/she is entitled to export the oil and gas part-owned by him/her.
- Foreign-invested economic organizations may not exercise import rights to oil derived from petroleum and oils obtained from bitumen minerals, except crude oil; preparations that have not been detailed or recorded elsewhere, containing a content of 70% or more of CSO oil derived from petroleum oils or other oils from bitumen minerals, these oils are the basic component of such preparations; waste oil.
- Foreign-invested economic organizations may not exercise distribution rights to crude and processed oil including petroleum and oils obtained from bitumen minerals, in crude form; Oil is derived from petroleum and oils obtained from bitumen minerals.
- Foreign-invested economic organizations may produce petroleum under conditions by the approved planning.
Petroleum distribution conditions
Traders with the following conditions are granted a Certificate of eligibility as petroleum distribution traders by the Ministry of Industry and Trade when:
- Enterprises are established by the provisions of law, in the Certificate of registration of enterprises with petroleum business registration.
- Having warehouses, tanks with a minimum capacity of two thousand cubic meters (2,000m3) owned by enterprises or co-owned or leased for use by traders trading in petroleum services for five (05) years or more.
- Having petroleum transport vehicles owned by enterprises or co-owned or leased for use by traders trading in petroleum services for five (05) years or more.
- Having laboratories owned by enterprises or co-owned or contracted services to hire state agencies with laboratories capable of testing and testing petroleum quality indicators by national technical regulations and applicable publishing standards.
- There is a petroleum distribution system in the area of two (02) provinces and centrally-run cities or more, including a minimum of five (05) retail stores owned or owned and co-owned, at least ten (10) stores belonging to petroleum retail agents are granted certificates of petroleum retail eligibility as prescribed.
- Managers and employees directly in business must be trained, trained, and have certificates of professional training and training in fire prevention, firefighting, and environmental protection by the current law.
The above are the investment conditions for foreign investors in the field of petroleum trading by Vietnamese law. If you have any questions or need advice on this matter, please contact us immediately for timely assistance.
It's funny how IBON could talk about Vietnam, then overlook why Vietnam is able to set its petroleum pricing policy. IBON still has the Vietnam War mindset. Does IBON really understand Vietnam's economic success, if ever?
