Vietnam accelerates shift to ethanol fuel as Iran war drives up energy prices

Vietnam will switch fully to ethanol-blended gasoline earlier than planned as part of its efforts to curb fossil fuel use, a government document showed on Friday, as the war in Iran continues to disrupt global energy supplies.

The Southeast Asian country will begin using E10 gasoline - a blend containing 10% bioethanol - from next month, according to a government directive signed by Prime Minister Pham Minh Chinh on Thursday, bringing forward a previous target of June 1.

Fuel prices in Vietnam have surged since the U.S.-Israel war on Iran began three weeks ago, with gasoline prices up 50% and diesel prices rising 70%, according to data from top fuel trader Petrolimex.

The disruption has "caused significant fluctuations in energy prices, creating numerous challenges for countries dependent on energy imports and increasing risks to the energy security of many nations, including Vietnam," the document said.

The directive urges authorities to introduce incentives for the production and use of electric vehicles and calls for the expanded development and use of renewable energy.

It also said Vietnam will completely eliminate the use of 20-watt to 60-watt incandescent light bulbs from the third quarter of 2026.

-Khanh Vu/Reuters