Policy tools tackle energy security risks

The price of fuel rose last week as the country tackled the oil supply situation affecting the globe

- By Nguyen Thu

The price of fuel rose last week as the country tackled the oil supply situation affecting the globe

The government has moved to stabilise Vietnam's fuel market through temporary tax reductions, price stabilisation funds, and an accelerated rollout of E10 biofuel to cushion supply risks.

Last week, the government issued a decree, cutting import tariffs on several petroleum products to zero, effective immediately from March 9. The move is aimed at stabilising the domestic market as geopolitical tensions continue to push global energy prices higher.

Under the decree, the preferential import tariff on unleaded motor gasoline and blending components such as naphtha and reformate has been reduced from 10 per cent to zero. The most-favoured nation import tariffs on diesel, fuel oil, aviation fuel, and kerosene have also been lowered from 7 per cent to zero.

In addition, several petrochemical feedstocks including xylene, condensate, and para-xylene have seen tariffs cut from 3 per cent to zero, while other cyclic hydrocarbons have been reduced from 2 per cent to zero. The tax reductions will remain in effect until April 30. After this period, import tariff levels will revert to their previous rates.

The decree states that if necessary to maintain fuel market stability and support socioeconomic development, the Ministry of Industry and Trade (MoIT) will propose extending the policy, with the Ministry of Finance (MoF) consolidating the proposal for government consideration.