Vietnam’s Gig Workers Struggle with Surging Fuel Costs Amid Iran Conflict
In Vietnam, gig workers are facing increasing challenges due to surging fuel costs linked to the geopolitical conflict in Iran. E-hailing drivers, particularly in Ho Chi Minh City, have reported significant reductions in their earnings as fuel prices continue to rise dramatically.
Impact of Rising Fuel Costs on Gig Workers
Nguyen, an e-hailing driver, shared that after working for seven to eight hours, he earned approximately 240,000 Vietnamese dong (around $9.11). However, he spent half of that on fuel, reflecting a harsh reality for many workers reliant on rideshare services. With over 7 million motorcycles in Ho Chi Minh City, the situation is dire, prompting some drivers to temporarily suspend their services.
Fuel Price Surge Amid Iran Conflict
The conflict involving Iran has severely affected fuel imports in Vietnam. The country typically sources about 80 percent of its crude oil from Kuwait, but the ongoing blockade in the Strait of Hormuz has disrupted shipments, causing a spike in fuel prices. Diesel prices have more than doubled, while petrol costs have risen nearly 30 percent.
- Diesel price increase: Over 100%
- Petrol price increase: Nearly 30%
Government Response to Rising Costs
The Vietnamese government has initiated emergency measures to alleviate the economic strain on citizens. Prime Minister Pham Minh Chinh announced a temporary suspension of environmental taxes on diesel, petrol, and aviation fuel, aiming to stabilize prices until at least mid-April.
However, this decision is projected to cost the government an estimated $273 million in revenue. Officials recognize the urgent need to address public dissatisfaction regarding rising living costs, as rising gas prices significantly impact daily life.
Broader Economic Effects
The repercussions of soaring fuel prices extend beyond gig workers. Public transportation systems have become overwhelmed, and airlines have reduced flight schedules due to increased operating costs. Local businesses, such as bus operators, are feeling the financial strain, often unable to offset losses through higher fares.
For instance, a bus operator on Ho Chi Minh City’s Route 13 reported a financial loss despite raising ticket prices minimally.
Challenges for Families
Low-income families are also adapting to the financial pressure. Uyen Pham, a communications manager, noted that many families have cut back on gas usage significantly, now relying primarily on wood for cooking.
This reduction in fuel accessibility has forced parents to leave their children with relatives while they seek work in cities, further straining family dynamics.
Path to Energy Independence
The volatility in fuel prices has prompted discussions on Vietnam’s energy independence. Experts suggest a need for rapid development of the country’s refinery capacity, as current resources are inadequate given the rising demand for fuel.
Authorities recently visited the Nghi Son Refinery, which supplies about 40 percent of the country’s petrol, to explore alternative sources of crude oil amid declining current supplies.
Shifts in Investment Strategies
The ongoing fuel crisis has also prompted changes in corporate investment strategies. Vingroup, Vietnam’s largest conglomerate, announced a shift from constructing a liquefied gas-fired power plant to pursuing renewable energy projects, citing uncertainty in fuel prices as a major concern.
Conclusion
As Vietnam navigates the rising fuel costs linked to international tensions, gig workers are feeling the immediate impact. The government’s measures to stabilize prices may provide temporary relief, but the long-term solutions for energy independence will require significant time and investment.
