Vietnam Cuts Down Petroleum Import Tariffs to 0 per cent

Vietnam Cuts Down Petroleum Import Tariffs to 0 per cent

Vietnam’s Ministry of Finance yesterday signed a decision to reduce the import tax on several petroleum products to 0 per cent from 5 per cent, effective from today [March 16], according to local media.

The free tax items include leaded gasoline, non-lead gasoline and other light oil products.

This is for the third time this year the MoF has amended the petroleum import tariffs. It had raised the tax from 0 per cent to 15 per cent from January 6 and then reduced to 5 per cent from February 6.

The reason for the tax cut is contributed to the continual crude oil price rise in the global market, Quach Duc Phap, head of the Finance Ministry's Tax Policy Department, said.

“This move also helps local petroleum importers curtail losses and ease oil price rise pressures in the local market,” he added.

Phap said his ministry is controlling import tariffs so that domestic prices would keep in step with global trends without frequent adjustments.

Oil climbed 27 per cent to US$55.22 a barrel in New York yesterday, to approach last October’s all-time high of US$55.67 while in London Brent crude for April delivery increased by 23 per cent to US$53.89, not far off last week’s record price of US$54.3.

Crude oil prices are forecast to continue escalating in the coming days, Phap said.

In May 2004, the MoF also removed import duties on gasoline, condensates, kerosene, diesel, naphtha and reformate when the oil prices in the world market surged.

Vietnam, the sixth largest crude oil exporter in Asia, has to import almost all refined petroleum products to feed the national energy consumption because it has no refineries.

Vietnam plans to import 2.9 million metric tons of petroleum products in the first quarter this year, up from 2.87 million tons in the first quarter of last year.

In 2004, it was estimated to import 10.87 million of refined oil, up 9.2 per cent against 2003.

VNS