On March 26, the Civil Aviation Authority of Vietnam (CAAV) submitted a report to the Ministry of Construction regarding plans for air transport operations amid fluctuations in Jet A-1 fuel prices.
According to the authority, ongoing tensions in the Middle East with no clear signs of easing have kept the average Jet A-1 fuel price in March at around US$190–US$200 per barrel. Notably, the physical premium has surged to over US$30 per barrel. In addition, rising refining costs, war risk insurance, and localized supply shortages due to reduced output at regional refineries have significantly driven up total aviation fuel costs, which are forecast to remain at high levels.
According to the Civil Aviation Authority of Vietnam, enterprises are currently making efforts to seek and diversify appropriate supply sources, with support and facilitation from state agencies through various communication and diplomatic channels at different levels.
Aviation fuel suppliers have committed to ensuring supply for operations through mid-April 2026. Beyond this period, the availability of Jet A-1 fuel cannot be guaranteed, and imports or purchases will likely have to be made at significantly higher prices.
In light of the current situation and anticipated developments, the Civil Aviation Authority of Vietnam has recommended that the Ministry of Construction consider and report to the Government and competent authorities on urgent measures to support aviation operations amid unfavorable fluctuations in Jet A-1 fuel prices.
Specifically, it proposed allowing the application of a fuel surcharge mechanism for domestic economy-class passenger transport services set outside the regulated fare ceiling with flexible adjustments in line with Jet A-1 price movements. It also suggested extending the 0 percent import duty policy, reducing the environmental protection tax on Jet A-1 fuel from VND1,500 (US$0.05) per liter to VND1,000 (US$0.03) per liter, and lowering the value-added tax (VAT) on aviation fuel to ease cash flow pressures on enterprises, which are currently required to prepay VAT before completing tax refund procedures.
