The Vietnamese Ministry of Trade proposed lowering the tax rate on refined oil imports, following the continued increases in global crude oil price.
A ministerial source said the move aims to help oil importers and distributors ease the financial burdens as the world rate has jumped to a new high.
Under the current rule, oil traders are not allowed to change retail prices of petroleum products without permission from governmental agencies.
The ministry said after hovering stably at US$50-55 a barrel, the crude oil price has been rising in the last two weeks. On February 26, a barrel of oil was traded at US$61.
The higher oil price has caused difficulties for oil importers, a trade ministry official said, adding that “This has prompted the Ministry of Trade to ask the Government to lower the tax rate on oil imports.”
The current import tariff rate of 15 per cent was fixed when oil price stayed at US$54-55 a barrel, a Hanoi-based trader said.
If the rate remains at this level while oil price hovers at US$60 a barrel, oil importers, who are also sellers, will continue incurring losses.
At present, oil importers are suffering a loss of VND200 for every liter of petrol sold and VND100 for every liter of oil.
According to the General Statistics Office (GSO), Vietnam imported 1.82 million metric tons of petroleum products worth US$879 million in the first two months of 2007, up 9.7 per cent and 12.8 per cent against the same period last year.
The Southeast Asian nation is estimated to import more than 13 million tons of petroleum products to feed its energy demand.
To date, Vietnam is heavily reliant on imported petroleum as it has no refining facility. Its first refinery, Dung Quat, is scheduled to go on-stream in early 2009. (VietNamNet)
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