Vietnam can control domestic petrol prices by adjusting taxes, fees: experts

12-Jun-2021 Intellasia | SGGP News | 5:02 AM Print This Post

Rising global oil prices have been putting pressure on gasoline prices in the domestic market. According to the report of the general Statistical Office of Vietnam under the Ministry of Planning and Investment, an increase of 12.08 percent in the five-month domestic gasoline prices and 15.32 percent year-on-year in gas prices are one of the main reasons for the rise in the consumer price index (CPI) in the first five months of this year.

Accordingly, the average core inflation in the first five months of this year increased by 0.82 percent compared to the same period last year, lower than the overall average CPI of 1.29 percent. This reflects the fluctuations in consumer prices since the beginning of the year, mainly because the prices of food, petrol, and gas climbed.

To limit the hike in domestic retail gasoline prices, contributing to stabilising commodity prices in the market, supporting the life, production, and business activities of people and enterprises, in the last price adjustment at the end of May, the inter-ministries of Industry, Trade, and Finance continued to use the fuel price stabilisation fund at a high level for all types of petrol and oil products to ensure the objectives of controlling inflation and stabilising the market.

Worryingly, the oil price movement in the global market has not shown any signs of slowdown but is even forecasted to increase to the threshold of $80 per barrel in the upcoming months. Meanwhile, Vietnam’s crude oil export output is currently on a strong downward trend.

It is forecasted that in the near future, Vietnam’s crude oil import demand for processing and using for production and consumption will continue to rise. In this context, according to the analysis of economic experts, authorities can control domestic gasoline prices at an appropriate level if they want. Because currently, in the petrol price structure of Vietnam, the taxes and fees account for about 50-55 percent.

When the world oil prices climb, the State can balance to adjust the tax and fee levels besides using the fuel price stabilisation fund to reduce the domestic gasoline prices while ensuring the control on inflation and being close to the actual situation.


Category: Economy, Vietnam

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