Fighting inflation key mission this year: minister

One key mission in achieving this goal is increasing the productivity of domestic companies, which will help increase product value and subsequently raise people’s income, he told the National Assembly on Thursday.

Lowering gasoline prices using taxes is one of the measures Vietnam could take to slow down inflation, but such proposals need to consider the risk of encouraging gasoline smuggling if Vietnam gasoline prices are substantially lower than other countries’, he said.

Vietnam’s rates are VND11,000 lower than Laos’ and VND3,000 than Cambodia’s, he added. "If we are not careful, when our prices are low, gasoline would flow to other countries."

Phoc added that Vietnam’s gasoline taxes only account for around 30 percent of gasoline prices, compared to 45-60 percent in other countries.

The more important solution would be to increase the capacity of domestic refineries, Nghi Son and Dung Quat, Phoc said.

Inflation has become a major concern to lawmakers and government leaders this year as the Russia-Ukraine crisis and rising global demand for materials and ingredients after two years of Covid-19 push prices up.

Vietnam’s inflation in the first five months hit 2.25 percent against 1.29 percent in the same period last year.

Standard Chartered expects the country’s full-year inflation to be at 4.2 percent in 2022 and 5.5 percent in 2023, against the government’s target of keeping it under 4 percent.

Inflation was 1.8 percent last year, the lowest in six years.