Fuel Prices Soar, App-Based Informal Sector Workers in Vietnam Hit

JAKARTA - The rise in fuel prices due to the Iran war has begun to put pressure on the income of informal sector workers based on applications in Vietnam. Al Jazeera, quoted Tuesday, April 7, reported that in the country, the price of solar has more than doubled, while gasoline has risen by almost 30 percent after supplies were disrupted by Iran's blockade of the Strait of Hormuz.

In Ho Chi Minh City, an online motorcycle taxi driver named Nguyen admitted that half of his income was spent just on buying gasoline. In seven to eight hours of work, he earned around 240,000 Vietnamese dong, but 120,000 dong of it went straight to fuel. "I can't survive with that amount of money in this city," he told Al Jazeera.

Vietnam usually gets about 80 percent of its crude oil from Kuwait. However, shipments have been slowed down amid Iran's effective blockade of the Strait of Hormuz. The impact was felt quickly on the road. Many drivers choose to turn off the app and go home because the cost of work is no longer comparable to income.

The Vietnamese government then suspended environmental taxes on diesel, gasoline, and aviation fuel until April 15 to hold down prices. ISEAS-Yusof Ishak Institute researcher Nguyen Khac Giang said the move was taken to ease the pressure on the cost of living while maintaining economic stability.

The pressure is not only hitting app drivers. According to an Al Jazeera report, public transport in major cities is overcrowded, while Vietnam Airlines and Vietjet Air have cut flights. Bus operators in Ho Chi Minh City are also said to be losing money even though ticket fares have been raised by 3,000 Vietnamese dong.

In the coastal area of Binh Thuan, fishermen also felt a similar blow. The cost of sailing increased, but the selling price of fish actually fell. The catch, which usually sells for 800,000 Vietnamese dong, is now only paid 650,000 dong.

The increase in energy costs is also starting to enter the household kitchen. A number of low-income families in the Mekong Delta are said to be increasingly limiting the use of cooking gas and are relying on firewood again. For workers from the area who work in the city, the rising return costs also make them less likely to meet their families.

The crisis has also prompted Hanoi to look again at energy independence. The government is now looking for alternative crude oil sources for the Nghi Son Refinery, which supplies about 40 percent of Vietnam's gasoline needs. At the same time, Vingroup reportedly wants to stop the country's largest LNG-based electricity project and divert funds to renewable energy.