Vietnam Cuts Fuel Tariffs Amid Iran War Supply Disruptions
Vietnam has announced plans to eliminate its import tariffs on fuels, aiming to address supply disruptions linked to the ongoing military conflict in the Middle East. This decision comes amid rising fuel prices and is intended to help stabilize the domestic petroleum market.
Details of the Tariff Removal
The removal of fuel tariffs is set to be effective until the end of April. Currently, import tariffs on fuels in Vietnam can reach up to 20%. However, many imports from countries with which Vietnam has free-trade agreements are exempt from these tariffs.
Impact on Fuel Prices
- Domestic fuel prices have surged between 21% and 32% since the outbreak of the U.S.-Israeli conflict with Iran.
- The fuel tariff removal is projected to decrease state revenue by approximately 1.02 trillion dong.
- This figure translates to around $39 million based on current exchange rates.
Government’s Justification
The Vietnamese government stated that this measure is crucial for businesses. It aims to help them secure supply sources more effectively. Furthermore, the initiative is part of a broader strategy to ensure energy security and stabilize the domestic market.
This resolution is currently being prepared by the Ministry of Finance as part of Vietnam’s response to ongoing global supply chain challenges.
