From 9/3/2024, import taxes on various petroleum products and blending materials (naphtha, reformate, condensate, etc.) were reduced from 7-10% to 0%. However, this regulation was set to expire on 30/4/2024.

In a resolution dated 30/4/2024, the government agreed to extend Decree 72, which amends the most favored nation (MFN) import tax rates for certain petroleum products and input materials. MFN is a tariff rate applied only to World Trade Organization (WTO) member countries.

Consequently, the application period for Decree 72 has been extended until 30/6/2024, adding two months to the current regulation. During this time, preferential import taxes on some petroleum products will remain low, with some items staying at 0%.

A gas station attendant pumps fuel for a customer. Photo: Giang Huy.

Maintaining low import taxes is considered a short-term tool to stabilize the domestic petroleum market amid the complex developments of the Middle East conflict. Previously, the Ministry of Finance stated that when preferential import taxes on petroleum products were reduced to 0% from early March, businesses gained access to alternative supplies. This was crucial as supply chains in traditional markets like South Korea and ASEAN were disrupted by military conflicts. Consequently, domestic supply was ensured, helping to stabilize the petroleum market and the macroeconomy.

However, the military conflict in the Middle East remains complex and unpredictable. According to assessments by Vietnam National Petroleum Group (Petrolimex) and Binh Son Refining and Petrochemical Joint Stock Company (BSR), even if the military conflict ends, oil and gas infrastructure in the Middle East would require at least 5-7 weeks to restore capacity. If the 0% MFN tax rate on petroleum products and input materials were to cease at the end of April, a supply shortage could re-emerge.

The Ministry estimates that extending the tax policy for two additional months will reduce budget revenue by approximately 997 billion VND, bringing the total revenue reduction since its implementation to 2,021 billion VND.

Since late February, domestic petroleum prices have undergone 19 adjustment periods. During this time, RON 95-III gasoline prices increased 10 times, decreased 7 times, and remained unchanged two times. Similarly, diesel prices rose 9 times, fell 8 times, and were stable for two periods. Currently, RON 95-III gasoline is priced at 23,750 VND per liter, while diesel and mazut are 28,170 VND and 20,020 VND respectively.

In addition to preferential import taxes, other taxes such as environmental protection, special consumption, and value-added tax (VAT) on gasoline, oil, and jet fuel will also remain at 0% until the end of June, as stipulated by a National Assembly resolution.

Phuong Dung