Market and product
Tax, fee make up one-third of petrol prices
Fuel retail prices are still higher than other markets although crude oil prices have kept falling on global markets in recent days as taxes and fees account for one-third of the domestic fuel prices.
For each barrel of fuel imported into Vietnam at US$81, local traders have to pay tariff of nearly VND3,000 per liter, special consumption tax of VND1,400 per liter, environmental fee of VND1,000 per liter and value added tax of VND1,800 per liter. Therefore, fuel importers have to spend more than VND7,000 on tax and fee payments for every liter of petrol imported.
The respective figures are VND5,000 per liter of diesel, VND5,200 per liter of kerosene and VND4,000 per kilo of heavy fuel oil, as the special consumption tax and environmental fee are not imposed on those products.
Retail prices of A92 gasoline, diesel and kerosene have been at VND19,930 per liter, VND18,410 per liter and VND18,360 per liter respectively on the domestic market from December 6.
The Ministry of Finance also adjusted fuel import duties on the same day, raising tax rate of petrol imports by nine percentage points to 27%, diesel 0.05S to 23% from 14%, and kerosene to 26% from 16%.
A fuel wholesaler said the current retail prices of fuel products are almost equivalent to the levels on the market on February 2, 2011, which were VND19,300 per liter for A92 petrol and VND18,250 per liter for diesel.
However, fuel import prices at the two periods are completely different.
In 2011, traders paid more than US$105 to import one barrel of petrol, over US$115 for one barrel of diesel 0.05S and the same cost for kerosene, and enjoyed free import tariffs.
Meanwhile, fuel prices on December 10 stood at US$71.39 per barrel of A92 petrol, US$79.56 per barrel of diesel 0.05S and US$80.71 per barrel of kerosene in Singapore, falling by US$5-7 per barrel against the previous week, according to the Ministry of Industry and Trade.
The current import prices of fuel are even lower than on June 11, 2010, which were US$79.42 per barrel of A92 petrol, US$84.63 per barrel of diesel 0.05S and US$84.43 per barrel of kerosene as listed on the website of Vietnam National Petroleum Group (Petrolimex).
The import tax rates on A92 petrol, diesel 0.05S and kerosene were 17%, 10% and 15% respectively at that time.
Fuel wholesale traders said with the current fuel import prices, the base price, which is constituted by the world’s average 30-day price plus taxes and costs and used to set local retail prices, is lower than the current fuel retail prices by around VND400 per liter. So the retail fuel prices may fall further in the next few days.
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