Business

Vietnam can control domestic petrol prices by adjusting taxes, fees: experts

SGGP
Rising global oil prices have been putting pressure on gasoline prices in the domestic market. According to the report of the General Statistics Office of Vietnam under the Ministry of Planning and Investment, an increase of 12.08 percent in the five-month domestic gasoline prices and 15.32 percent year-on-year in gas prices are one of the main reasons for the rise in the consumer price index (CPI) in the first five months of this year.
Vietnam can control domestic petrol prices by adjusting taxes, fees: experts ảnh 1 Illustrative image
Accordingly, the average core inflation in the first five months of this year increased by 0.82 percent compared to the same period last year, lower than the overall average CPI of 1.29 percent. This reflects the fluctuations in consumer prices since the beginning of the year, mainly because the prices of food, petrol, and gas climbed.

To limit the hike in domestic retail gasoline prices, contributing to stabilizing commodity prices in the market, supporting the life, production, and business activities of people and enterprises, in the last price adjustment at the end of May, the inter-ministries of Industry, Trade, and Finance continued to use the fuel price stabilization fund at a high level for all types of petrol and oil products to ensure the objectives of controlling inflation and stabilizing the market.

Despite the global pandemic situation, world crude oil prices have continuously reached new peaks. Specifically, in the latest trading session in early June, the US WTI light sweet crude oil on the global market reached US$72 per barrel. Similarly, North Sea Brent crude oil also soared sharply, surpassing $71 per barrel (Source: oilprice.com).
Worryingly, the oil price movement in the global market has not shown any signs of slowdown but is even forecasted to increase to the threshold of $80 per barrel in the upcoming months. Meanwhile, Vietnam's crude oil export output is currently on a strong downward trend.
It is forecasted that in the coming time, Vietnam's crude oil import demand for processing and using for production and consumption will continue to rise. In this context, according to the analysis of economic experts, authorities can control domestic gasoline prices at an appropriate level if they want. Because currently, in the petrol price structure of Vietnam, the taxes and fees account for about 50-55 percent.

When the world oil prices climb, the State can balance to adjust the tax and fee levels besides using the fuel price stabilization fund to reduce the domestic gasoline prices while ensuring the control on inflation and being close to the actual situation.

By Lac Phong – Translated by Gia Bao

Other news