Vietnam halves import tariff on gasoline to 10%
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Vietnam halved its Most Favored Nation (MFN) tariff on gasoline to 10% Monday as it seeks to diversify supply.
The MFN import tariff is a standard rate applied for trade between World Trade Organization (WTO) members unless a separate trade agreement exists.
But the cut is unlikely to reduce gasoline prices since Vietnam imported over 90% of its fuel from ASEAN member countries and South Korea under free trade agreements (FTAs) at 8% tariff.
But it will reduce Vietnam’s dependence on those sources and help diversify its supply.
Taxes account for 19.4-22% of gasoline prices in Vietnam, lower than in many other countries.
After four downward adjustments in recent days a liter of RON 95 gasoline now costs VND25,600 ($1.09), the lowest since late-February.
Questions & Answers
Q.Will this tariff reduction lead to lower petrol prices for consumers in Vietnam?
Will this tariff reduction lead to lower petrol prices for consumers in Vietnam?
No, the article indicates this cut is unlikely to reduce gasoline prices. Vietnam already imports over 90% of its fuel from ASEAN members and South Korea under FTAs, which have a lower 8% tariff.
Q.What was Vietnam's MFN tariff on gasoline before this recent change?
What was Vietnam's MFN tariff on gasoline before this recent change?
Vietnam's MFN tariff on gasoline was 20% before this recent change. It was halved to 10% on Monday, with the aim of diversifying its supply of fuel imports.
Q.What percentage of the gasoline price in Vietnam is made up of taxes?
What percentage of the gasoline price in Vietnam is made up of taxes?
Taxes currently account for between 19.4% and 22% of gasoline prices in Vietnam. This level is stated to be lower than in many other countries.
Q.How will this tariff cut affect Vietnam's reliance on its current fuel suppliers?
How will this tariff cut affect Vietnam's reliance on its current fuel suppliers?
This tariff cut will reduce Vietnam’s dependence on its current fuel sources, primarily ASEAN member countries and South Korea. It aims to help the country diversify its overall supply.
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