Vietnam cuts environmental tax to curb fuel price rise

The National Assembly Standing Committee has adopted a resolution on lowering the environmental protection tax on petrol and oil to curb the rising prices of these commodities.

Effective from July 11 to the end of 2022, the environmental tax on a litre of petrol will be cut from 2,000 VND to 1,000 VND, while the tax on jet fuel and diesel will drop by 500 VND per litre.

Calculations show that fuel costs currently account for 3.52% of the Vietnamese economy’s total costs and that if fuel prices go up by 10%, the gross domestic product will go down by about 0.5%.

Therefore, curbing fuel price rise is highly significant in efforts to keep inflation in check.

Speaking at a session on July 6 to approve the measure, National Assembly Chairman Vuong Dinh Hue stated that petrol and oil are both strategic materials and essential goods.

He noted that the management of fuel prices is conducted following market principles but with State regulation.

The parliamentary leader asked the Government to ponder over the value added tax and special consumption tax on oil products and submit proposals to the National Assembly for approval, in case their prices keep rising or remain high.

Besides cutting tax, Chairman Hue also called for measures to support those directly hit by high fuel prices, including offshore fishing, transport and low-income households.