Lower petrol import tax proposed

Ministry of Trade has proposed to lower the tax rate on oil and petrol imports, following the continued increases in crude oil prices.

A source from the Ministry of Trade (MoT) said that the ministry has proposed to lower the tax rate on imported petrol in order to help petrol importers and distributors ease the financial burden. The oil price in the international market has been increasing continuously, while importers are not allowed to raise the selling prices of petrol.

According to MoT, after hovering stably at 50-55US$/barrel, the oil price has kept rising in the last two weeks, now trading at 60US$/barrel. In the morning of February 26, a barrel of oil was traded at 61US$.

The oil price increases have put big difficulties for the operation of key petrol importers, which has prompted MoT to ask the Government of the lowering of the tax rate on petrol imports.

Petrol importers said that the currently applied tax rate of 15% was defined by state management authorities when considering that the oil price stayed at 54-55US$/barrel. And it is understandable why petrol importers have been incurring losses while the oil price has hit the 60US$/barrel level. With the current tax rate and the current crude oil price level, petrol importers are suffering the loss of VND200/litre of petrol and VND100/litre of oil.
Earlier this year, when the crude oil price dropped to nearly 50US$/barrel, the Ministry of Finance decided to raise the petrol import tax to 15%, while MoT decided to lower the retail petrol price by VND400/litre.

Source: VNE