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Ministry cuts import tax on petrol to hold line on prices

Update: February, 22/2012 - 10:58

HA NOI — The Ministry of Finance decided to lift the import tax on all kinds of petrol yesterday to prevent petrol dealers from raising their retail prices, according to a Ministry of Finance's circular issued on yesterday morning.

The previous tax rate of 4 per cent was imposed for nearly two months.

Under Circular 25/2012/TT/BTC, an import tax on diesel oil will also be cut from the current 5 per cent to 3 per cent. However, the ministry will keep the import tax rate on lubricants oil unchanged at 5 per cent.

Besides the tax adjustment, petrol and oil retailers would be also allowed to use money from the Price Stabilisation Fund to offset part of their losses, the ministry said.

The ministry said it made the move to stabilise the domestic petrol and oil market in a context of rising oil prices in the global market over the past few weeks. Imported oil prices in Singapore, the main source of Viet Nam's imported petrol and oil, have risen sharply for the past 20 days. The oil prices reached US$130 per barrel, up nearly 6 per cent against January.

Domestic petrol retailers said that they were suffering a loss of more than VND1,000 per litre.

Possible A83 ban

The Ministry of Industry and Trade (MoIT) and the Ministry of Science and Technology had agreed on a proposal to the Prime Minister for a ban on the processing and distribution of A83 second-rate petrol in the domestic market, said director of the MoIT's Domestic Market Department Vo Van Quyen.

Quyen said if the proposal was approved, the ministries would soon publicise detailed itineraries for the prohibition and the new rules for producers.

The country currently has only three producers, Saigon Petro, PV Oil and Nam Viet Co, churning out the second-rate petrol, which still negatively impact the environment.

The ban is also a reaction to the authorities' recent finding of several petrol dealers mixing A83 petrol with A92 or A95 for the latter's prices. Prices of the latter are much higher than the first.

General director of the Saigon Petro Dang Vinh Sang said that his corporation could produce other kinds of petrol if the depreciation value of its A83 production lines was out.

PV Oil representatives also said that the possible ban on A83 petrol processing would not affect their corporation's performance as they had planned to turn to produce other kinds of petrol with higher octane index to meet domestic demands. — VNS

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