Vietnam cuts oil and petrol tariff to zero

Tax on oil and petrol imports has been slashed to zero percent starting tomorrow from the previous 2-5 percent to ease pressure on domestic prices, the Ministry of Finance said Wednesday in a circular.

This is the fifth time since late last year Vietnam has lowered its tariff to support local businesses.

Businesses now suffer huge losses since global oil prices are shooting up, the ministry said, elaborating they lose VND3,000 (US$0.15) on each liter of petrol and VND4,000 ($0.19) on each liter of oil.

The tax cut is meant to partly offset the losses, stabilize retail oil and petrol prices, and contain inflation, it added.

A fuel price stabilization fund which is running out was once used as a tool to control oil and petrol prices.

Vietnam sees oil and petrol as a critical part of the nation’s energy security so it tightly controls their prices.

It has set inflation target this year at 7 percent or less after last year’s 11.75 percent rate, way above the 8 percent proposed one.

The country is facing tough challenges when gas stations have limited operations or even stayed closed in anticipation of a rumored price hike in the coming months. Oil and petrol have been smuggled across borders to neighboring Cambodia as well.

tuoitrenews, VNExpress

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