Vietnam to import more gasoline from Southeast Asia: Finance Ministry

The Ministry of Finance (MOF) says that petroleum companies will shift to importing fuels from Southeast Asia instead of South Korea.

Regarding import and export tax revenue in 2023, MOF told the National Assembly that it would not increase by 4-6 percent this year as targeted because of gradual tariff decreases. 

The average preferential import tariff is expected to fall by half by 2027. The average tariff in 2022 is 14.8 percent, while it would be 10.1 percent in 2021, 9.6 percent in 2024, 8.4 percent in 2025, 8 percent in 2026 and 7.5 percent in 2027.

As for petrol products, MOF said under ASEAN commitments, the petrol import tariff would be 5 percent by 2023, and zero percent for DO and FO. By 2024, import tax for petrol would be zero percent.

It said that local firms would shift to importing petroleum products from ASEAN instead of South Korea (still 10 percent). This would lead to a reduction in budget revenue because of free trade agreements (estimated crude oil price of $70 per barrel) on petroleum and other products. 

The reduction is estimated at VND18.5 trillion. Without this factor, the revenue estimate would increase by 5.6 percent in 2023 compared with 2022.

Regarding revenue from crude oil, which is predicted to be low in 2023, the MOF explained that according to PetroVietnam, the planned crude oil price in 2023 is set under three scenarios – $70, $75 and $80 per barrel.

According to some international institutions and experts, the crude oil price in 2023 would be around $70-80 per barrel. In September, some institutions predicted that Brent oil would be $90-100 per barrel in 2023.

The oil price may increase again to over $100 per barrel if there are two conditions: China removes restrictions related to Covid-19 control, and the US FED stops raising interest rates, so that the economy can regain growth.

Nevertheless, with unpredictable developments in the region and world, and risks of recession, the MOF said budget revenue needs thorough estimates, with a $70 per barrel scenario.

Luong Bang