On Thursday, diesel prices in Vietnam experienced a significant drop of 5.8%, reaching VND31,040 (US$1.18) per liter. This is the lowest price point for diesel since March 20. Conversely, gasoline prices saw a minor increase. The most commonly used fuel, RON95, rose by 0.93% to VND23,760, while biofuel E5 RON92 saw a 1.12% increase to VND22,590.
Internationally, there was a decline in the prices of the two primary crude oil benchmarks by 0.3% early Thursday. The Brent crude went for $94.6 per barrel, while U.S. WTI crude fell to $90.9. These price reductions occurred in response to investors’ expectation of a potential peace agreement between the United States and Iran.
The Vietnamese government maintained its fuel subsidy during this adjustment period, with VND400 per liter allocated for diesel and VND800 per liter or kilogram for gasoline and mazut. In addition, the government provided an extra VND8 trillion from the state budget as an advance for the subsidy fund.
In an effort to control inflation, lawmakers sanctioned tax waivers on fuel from April 16 to June 30. These waivers, which included the environmental protection tax, value-added tax, and special consumption tax, are anticipated to reduce state revenue by an average of VND7.3 trillion monthly.
Although this will impact state revenue, the government dubbed this as a “special fiscal measure applied in exceptional circumstances.” This action is intended to lessen the effects of energy price variations and to help maintain macroeconomic stability and social security.
Why did diesel prices drop in Vietnam?
Diesel prices in Vietnam fell by 5.8% due to fluctuations in the global market, coupled with the national fuel subsidy.
How did the Vietnamese government respond to these changes in fuel prices?
The Vietnamese government subsidized fuel during this adjustment period and allocated extra funds from the state budget for the subsidy fund.
What are the expected impacts of the tax waivers approved by the lawmakers?
The tax waivers on fuel are expected to decrease state revenue by an average of VND7.3 trillion per month. However, they aim to control inflation and maintain macroeconomic stability and social security.
