Tax cuts to maintain supply

Under the decree, MFN import tariffs on unleaded motor gasoline and gasoline blending components such as naphtha and reformate have been reduced from 10% to 0%. MFN import tariffs on diesel fuel, aviation fuel and fuel oil have been cut from 7% to 0%.

Meanwhile, tariffs on products such as xylene, condensate and p-xylene have been lowered from 3% to 0%, while other cyclic hydrocarbons see their tariff rate reduced from 2% to 0%.

The new tax rates were applied from March 9 to April 30, 2026. According to calculations by the Ministry of Finance, if the new tariff rates were applied to the 2025 import turnover, the State budget could see a revenue reduction of approximately 1.024 trillion VND.

Most petroleum imported into Viet Nam comes from ASEAN countries and the Republic of Korea, with tariff rates largely set at 0% under free trade agreement commitments, provided that a certificate of origin (C/O) is available. However, supplies from these partners are currently limited as petroleum inventories at partner storage facilities remain low, including fuel shipments without C/O. Reducing the import tariff to 0% will allow key petroleum traders to purchase fuel without C/O from ASEAN markets, helping diversify supply sources.

Assoc. Prof., Dr. Ngo Tri Long, an economic expert from the Financial and Investment Consulting Association, said the most important impact of the measure is not merely reducing retail fuel prices but expanding the ability of key importers to access supply amid strong volatility in the international market.

Once supply is secured, the risks of shortages, speculation, hoarding and stockpiling driven by market sentiment will be significantly reduced.

“Cutting taxes in the current context is a measure to curb inflation at its source. Inflation caused by shortages is always more dangerous than inflation driven purely by rising costs. If businesses can flexibly import from a wider range of sources, the market will gain an additional buffer against shocks, helping prevent sharp increases in retail prices or price hikes driven by market sentiment,” the expert explained.

Meanwhile, Nguyen Thu Oanh, Head of the Service and Price Statistics Department under the Statistics Office, noted that ensuring a stable supply for the market is a crucial factor in mitigating negative impacts on the general price level.

Amid concerns about the possibility of a major price shock similar to the early stage of the Russia-Ukraine conflict in 2022, Oanh said fuel prices depend on various factors, including global oil supply-demand dynamics, the degree of supply disruption and domestic fuel price management.

However, alongside ensuring supply, authorities should also flexibly manage petrol prices while making appropriate use of policy tools such as taxes, fees and the fuel price stabilisation fund to prevent excessive fluctuations, thereby stabilising the market and controlling inflation.

A buffer for macroeconomic stability

According to economic expert Ngo Tri Long, Viet Nam’s experience in price management over recent years shows that the highest effectiveness comes from coordinating multiple tools simultaneously, rather than relying on a single measure.

When energy markets fluctuate, tax policy helps reduce input costs; the stabilisation fund mitigates short-term shocks; monetary policy helps stabilise exchange rates, interest rates and credit flows; while fiscal policy provides targeted and timely support to prevent inflation from accelerating.

However, as this is the first year of efforts to achieve double-digit economic growth, additional measures are required to both control inflation and sustain growth.

Accordingly, the policy of reducing petroleum import tariffs should be implemented promptly alongside supervision mechanisms to ensure the tax reduction is effectively translated into greater supply and reduced price pressure.

At the same time, more transparent principles should be established for the use of the petrol price stabilisation fund when it needs to be deployed.

Authorities may also consider delaying adjustments to certain state-regulated prices and fees if they coincide with sharp increases in fuel prices, so as to avoid overlapping waves of price hikes.

Dr Nguyen Quoc Viet, a public policy expert from the University of Economics under Viet Nam National University, Ha Noi, said that if the Middle East conflict continues or escalates, it could negatively affect Viet Nam’s inflation control efforts and growth drivers.

This could in turn affect economic growth prospects as well as the goal of achieving double-digit growth. Over the longer term, it is necessary to further strengthen the foundations of macroeconomic stability, support businesses and households in maintaining production, and develop response scenarios for emerging challenges such as inflation and exchange rate volatility, which are directly influenced by global uncertainties.

At the same time, greater coordination between fiscal policy and monetary policy is needed to control inflation and limit the negative impact of external shocks. The key is to maintain macroeconomic stability as a “buffer” to ensure the stable functioning of the economy amid the current volatility.

Drawing on lessons from successful price management and inflation control in recent years, particularly during the fuel price volatility in 2022, the Statistics Office has recommended that the Government consider measures to support businesses through flexible management of fuel prices, transport charges and certain logistics-related fees. It also suggested studying the reduction or deferral of some fees and charges in export activities, especially for heavily affected sectors such as agriculture, seafood and textiles.

Meanwhile, the State Bank of Viet Nam should direct credit institutions to expand access to capital, consider debt rescheduling mechanisms and loan restructuring, and reduce lending rates for export enterprises affected by rising input costs and longer transport times.

Relevant ministries and agencies should also intensify trade promotion activities, support businesses in seeking alternative markets or expanding into markets less affected by geopolitical tensions, and provide updated information on shipping routes, logistics costs and supply chain risks to help businesses adjust their export plans.

Another important solution is to strengthen the provision of market information and forecasts on energy price movements, transport costs and international trade developments, enabling businesses to proactively formulate production and business plans and manage risks.

At the same time, businesses should be encouraged to optimise supply chains, increase the localisation rate of raw materials, apply technology in logistics management and accelerate the green transition to reduce dependence on global energy price fluctuations and improve the resilience of export enterprises.