A driver in Hà Nội fills up a motorbike at a gas station. VNA/VNS Photo

HÀ NỘI — Measures taken to bring down petrol prices could reduce State budget collection by VNĐ32.5 trillion (US$1.4 billion) this year, according to deputy minister of finance Nguyễn Đức Chi.

Speaking to reporters at the ministry's monthly meeting, Chi said the Ministry of Finance has put forward a proposal to cut or remove a number of fees and taxes on fuel imports in an attempt to rein in rising petrol prices, which has been hurting economic recovery and businesses.

The proposal, which has been approved by the National Assembly's Standing Committee, brought import tax on gasoline from VNĐ2,000 to VNĐ1,000, jet fuel from VNĐ1,500 to VNĐ1,000, diesel from VNĐ1,000 to VND500 and lubricant from VNĐ,000 to VND300.

Chairman of the NA Vương Đình Huệ said as fuel was considered among the country's strategic commodities the government was to utilise all measures and policies at its disposal to regulate prices for the benefit of economic recovery and stability. 

The deputy minister said if implemented from August, the cuts would likely result in a VNĐ7 trillion (US$302 million) drop in the State budget. Combined with previous cuts under decisions by the NA's Standing Committee since the beginning of the year, the State budget collection, by the ministry’s estimation, will fall by $1.4 billion in 2022.

As global oil prices continue to rise, Việt Nam’s oil export was said to increase by VNĐ9 trillion this year, which helps offset the drop in State budget collection after the tax cuts.

“We have also been looking into other ways to help bring down domestic petrol prices including possible import tax breaks, VAT and special consumption tax cuts,” said the deputy minister.

For the time being, the ministry is to closely watch global and domestic petrol prices to make sure timely interventions can be implemented to best support the country’s socio-economic development.

Bùi Ngọc Bảo, president of the Vietnam Petroleum Association (VINPA), called on the ministry to reduce the country’s current most-favoured-nation tariff from 10 per cent to 8 per cent for a fixed period of time and to tighten regulations on fuel trading.

In a recent online conference with local governments, Prime Minister Phạm Minh Chính told governmental offices and ministries all policy and fiscal tools were made available to policymakers in order to bring down Việt Nam’s petrol prices. However, he said the implementation must be carried out step-by-step to ensure fuel traders receive the best possible support.

Since the beginning of the year, fuel prices in Việt Nam have increased 13 times, bringing fuel prices to a historically high level with RON 95-III gasoline (the most commonly used type in the country) to VNĐ32,760 per litre, E5 RON 92 to VNĐ30,890 and diesel to VNĐ29,610 per litre, nearly 50 per cent higher than January 2022. — VNS