Petrol imported under the MFN tariff has accounted for a negligible proportion of the total petrol consumption on the domestic market (Photo: VNA) Theministry said that the proposed tariff rate could not significantly reducedomestic petrol prices because Vietnam now mainly imports petrol from the Associationof Southeast Asian Nations (ASEAN) and the Republic of Korea.
However,the difference of 4 percent between the MFN tariff rate and the FTA tax ratefor petrol is reasonable. It would encourage the domestic enterprises todiversify petroleum supply from other countries such as China, the US, andcountries in the Middle East, avoiding dependence on a few partners, especiallyif the supply in the world market fluctuates.
Atthe same time, it would also ensure room to negotiate new FTAs in the futurebased on the principle of reciprocity.
Thisproposal on reducing the MFN tariff for petrol is included in the draft ofadjusting many kinds of export and import tariffs, consulted by the MoF.
Theministry said that it had received recommendations to reduce the preferentialimport tax rate for petrol products to diversify supply in the context ofhaving many fluctuations in the world petroleum market.
Fromthe beginning of 2022 until now, the world petroleum market has continued tohave a complicated performance. Especially, the conflict between Russia andUkraine in February has strongly affected the petroleum supply on the worldmarket, while the demand for this commodity is increasing because countriesworldwide are implementing their economic recovery measures.
InVietnam, supply and prices have also changed according to the world petroleummarket. The country now has 36 leading petroleum trading enterprises, includingthree flying fuel trading enterprises and more than 300 petroleum distributionenterprises supplying petrol and oil for the domestic retail system. Of which,the Vietnam National Petroleum Group accounts for about 45-50 percent of themarket share, and the remaining key enterprises hold 50-55 percent of themarket.
Thepetrol and oil supplies for the domestic market are mainly from the Nghi Sonand Binh Son Refinery and Petrochemical Plants, and the rest are importedmostly from the RoK and the ASEAN region with the import tax rates under theFTAs.
Atpresent, unleaded petrol for producing RON92 and RON95 petrol has a tariff of20 percent under the MFN and Europe-Vietnam FTA and 8 percent under the Vietnam- Korea FTA, the ASEAN Trade in Goods Agreement, the Comprehensive andProgressive Agreement for Trans-Pacific Partnership, and the Vietnam-EurasianEconomic Union FTA.
Thepetrol imported under the MFN tariff accounts for a negligible proportionof the total petrol consumption on the domestic market.
Accordingto MoF, petrol is a strategic commodity, having a significant impact on theeconomy. The fluctuation in the price of this commodity would directly affectthe price level on the domestic market and the national consumer price index.It also impacts the socio-economic development goals set by the NationalAssembly and the Government for 2022.
Recentdevelopments show that the world petroleum market will have many unpredictablefluctuations. This is forecast to affect the petrol supply of Vietnam.
Toensure national energy security in the context of the ongoing pandemic andpolitical conflicts globally, the ministry has proposed reducing the MFN tarifffor petrol products to diversify the supply./.
VNA
