Calculation of petroleum import tax based on weighted average of the tariffs along with locally produced petrol from Dung Quat Oil Refinery would benefit consumers, Vu Thi Mai, deputy minister of finance, said.

Normally, the ministry announced the petrol basis price and the import tax based on weighted average of the tariffs at the first month of every quarter. However, the ministry announced the import tax for the last quarter of the year on October 20 – one month later than usual at the rate of 8.56 per cent. The tax rate for the first quarter of the year was 10.56 per cent, while in the second and third quarters it was reduced to 10.21 per cent and 9.31 per cent respectively.

Mai said during a Q&A session at the National Assembly plenary session last week that the previous calculation was based on weighted average of the tariffs.

In the latest adjustment, the ministry proposed to add locally produced petrol of Dung Quat Oil Refinery with a tax of zero to the calculation.

The previous calculation was based only on Most Favoured Nation (MFN) tariff. However, following integration, Viet Nam’s petrol import tax was lower.

Specially, import-export tax for petrol imported from South Korea was 10 per cent, ASEAN was 20 per cent and MFN was 20 per cent. Petrol imported from other countries is part of the roadmap to reduce import taxes.

Petroleum import tax based on weighted average of the tariffs, taking into account MFN status and the Free Trade Agreement was, therefore, approved by the Prime Minister in March 2016 to ensure benefits for businesses and consumers.

“If we do not take into account the weighted average of the tariffs of Dung Quat Refinery, tax would be higher, leading to increased basis prices. The refinery accounted for some 40 per cent of the market’s petrol share. Specifically, in the first quarter of the year, Dung Quat made up 47 per cent of the country’s petrol market share,” she said.

The deputy minister added the PM has allowed to add Dung Quat to the calculation.

Recently, opinions on media said petroleum import tax based on weighted average of the tariffs of 8.56 per cent, which was lower than the 10 per cent tax of South Korea, could reduce imports from the country.

She said the ministry would continue to follow changes in the market and closely co-operate with the Ministry of Industry and Trade if there was any effect on petrol reserve and supply.

The Viet Nam Petroleum Group (Petrolimex) on Monday announced its balance of the petrol price stabilisation fund was VND3.24 trillion (US$143.3 billion), increasing by VND50 billion from the previous price adjustment on October 20.

In total, its balance was some VND100 billion following the two latest adjustments since October 5.

The ministries of industry and trade and finance said in the adjustment on November 4, they decided to increase spending for the petrol price stabilisation fund to VND300 per litre for petrol A92 and E5 bio-fuel, VND250 per litre for diesel, and VND270 per kilo for mazut.

The increasing expenditure from the fund aimed to stabilise petrol retail price following the rise in world petrol prices. — VNS