Government fears fuel price volatility, eyes extension of tax cut

By Quynh Trang October 16, 2023 | 07:35 pm PT

A gas station at the corner of Ly Chinh Thang and Truong Dinh Streets in District 3, Ho Chi Minh City in February 2022. Photo by VnExpress/Quynh Tran

The government plans to seek National Assembly approval to keep environmental taxes on gasoline and oil at half the regular rate until next year to keep fuel prices down.

Between April 2022 and December 2023 the rate was reduced by 50%, equivalent to VND2,000 (US$0.08) per liter of gasoline (except ethanol) and VND1,000 per liter of gasoline or diesel.

The Ministry of Finance wants to keep the tax at VND2,000 per liter on gasoline, VND1,000 on jet fuel, diesel and fuel oil and VND600 on kerosene, among others until the end of 2024.

The government has instructed the ministry to submit the proposal by October.

With the consumption of gasoline expected to remain unchanged next year, the ministry estimates a loss in revenues of VND42.8 trillion due the tax cut.

It said it is necessary to continue with the lower tax because global prices remain volatile, posing a potential threat to socioeconomic stability and impacting economic activity and consumers.