Vietnam lowers import duties on fuel products

11:18 | 17/04/2015 Industry

The Ministry of Finance recently lowered import tariffs on some fuel products in a move to stabilize domestic retail prices before an environment tax increase this May.

Vietnam lowers import duties on fuel products

The import taxes on gasoline, kerosene and diesel will be reduced from 30-35% to 20%, while the tax rate on mazut will be cut from 35% to 25%, with immediate effect.

Jet fuel will enjoy the lowest tariff – 10% – instead of 25% as present.

The ministry said the cuts aim to stabilize the domestic fuel retail prices before environment taxes on fuel products see a threefold increase on May 1.

Under a resolution issued by the National Assembly’s Standing Committee, new environment tax collections will be VND3,000 (US$14 cents) per liter for gasoline and jet fuel, VND1,500 per liter for diesel, and VND900 per liter for mazut.

Several days ago, Dung Quat, Vietnam’s only operational oil refinery, claimed that it is facing the risk of shutdown as it is struggling with gasoline imported from regional countries after import taxes were cut earlier this year.

Binh Son Refining and Petrochemical Company, a PetroVietnam unit and the operator of the Dung Quat refinery, said lower tariffs on fuel imports from Southeast Asia has made the company's products much less competitive in the local market.

Under a Ministry of Finance decision on January 1, the tariff on certain gasoline products imported from Southeast Asia is 20% and the tariff on diesel oil is 5%.

BSR claimed that the tariffs are “too low” compared to the import tariffs applied to the company’s gasoline and diesel oil, 35 and 30% respectively.

However, Pham Dinh Thi, director of the ministry’s Department of Tax Policies then rejected the claim as “groundless.”

He said Southeast Asian fuel products eligible for low tax rates only make up 0.08% of Vietnam's imports in terms of value. 

                                                                                                                                                                       Source VOV News