The decision came after the Ministry of Finance proposed lowering the tariff last month to encourage enterprises to import fuels from various countries, the local media reported.

In reality, the 10% cut in the MFN tax on unleaded gasoline will not make the price of the gasoline fall significantly due to the small proportion of imports from the countries subject to the MFN tax.

Vietnam is mainly buying gasoline from the countries signing free trade agreements with the former, with a low import tax rate.

However, the reduction will contribute to diversifying supply sources, avoiding heavy dependence on a few markets amid the uncertainty in global supply chains.

The ratio of taxes to which oil and petrol products are subject is much lower than the average ratios in many countries. Some nations are seeing taxes account for 40%-55% of the total price of gasoline and represent 35%-50% of the price of oil, said the Ministry of Finance.

In Vietnam, after the environmental protection tax on fuels was reduced twice in April and July, tariffs account for 19%-22% for each liter of gasoline sold and 11% for each liter of oil sold.

Statistics from the General Department of Vietnam Customs indicated in 2021, Vietnam spent over US$475.2 million on fuel imports. In the first five months of 2022, the total fuel imports hit US$826.5 million.

Source: Saigon Times