Environmental fuel tax to stay fixed until the end of the year
Environmental tax on fuel has been set to a fixed amount from now until the end of 2023 in an attempt to stabilise fuel prices in the domestic market and check inflation, according to a new decree issued by the National Assembly's Standing Committee.
Accordingly, environmental tax on gasoline (except for ethanol, which has already been taxed at a minimum level) for the year will stay at VND2,000 per litre, jet fuel at VND1,000 per litre, kerosene at VND600, mazut oil at VND1,000 per litre and lubricants at VND1,000 per kilo in a new tax regime released by the General Department of Taxation.
The regime is set to expire on January 1, 2024, and is subject to a review process by the committee.
The final decision has seen an uptick from a previous proposal by the Ministry of Finance.
Last year, fuel skyrocketed to a historic level, at times to around VND30,000 per litre of gasoline, due to rising global oil prices and difficulties in managing supply for the domestic market.
It has since come down to around VND23,000 per litre. There have been calls within the industry and economists for the government to abolish the tax and implement shorter price-cycles and a more market-oriented approach to managing supply and demand in the market.
The ministry, however, maintained the tax policy has been in line with the Vietnamese government's commitment to limit the use of fossil fuel and improve the country's environmental standards and its obligations at the 2021 United Nations Climate Change Conference (COP26) to reduce net emissions.
Petrol prices up
The retail prices of petrol increased in the latest adjustment yesterday by the Ministry of Industry and Trade and the Ministry of Finance.
The price of E5 RON 92 petrol went up VND330 per litre to VND21,350 (US$0.91).
Meanwhile, the retail price of RON 95 rose by VND350 to VNĐ22,150 per litre.
The prices of diesel oil remained unchanged at VND22,150 per litre and kerosene went up VNĐ600 to VNĐ22,760 per litre.
At this price adjustment, the two ministries decided to extract VND605 per litre from diesel oil and VNĐ200per liter from kerosene, and VND100 per kg from mazut for the petrol price stabilisation fund.
The adjustment of the retail petrol prices came after a new environment protection tax on gasoline passed by the National Assembly took effect on January 1.