The environmental protection tax rate on gasoline, diesel and aviation fuel would be slashed to zero from Friday to April 15, according to a trade ministry statement.

"This is considered an urgent and effective solution to stabilize the petroleum market and ensure national energy security amidst the escalating conflict in the Strait of Hormuz, which is creating the 'biggest energy bottleneck ever'," the trade ministry said in the statement.

Figures posted by the ministry showed the move would bring petrol prices down by around 26 percent and reduce diesel prices by just over 15 percent after the cost of fuel skyrocketed earlier this week.

The government also lowered the price of 95-octane petrol to 24,332 dong ($0.92) per litre on Friday, down from 32,957 dong, while diesel prices decreased to 35,440 dong per litre.

Vietnam had adjusted its fuel prices twice on Wednesday, bringing down costs after the price of diesel more than doubled since the start of the Middle East war late last month.

A surge in oil prices since the start of the conflict has sent fuel costs spiralling and sparked fears of shortages around the world after Iran partially closed the crucial Strait of Hormuz energy trade route.