VINACHEM

The Government has projected the State budget could lose around VND63 trillion this year due to the world oil price plunge.

The crude oil price has been on the rise since quarter three and now hovers around US$46 per barrel, according to the Government’s report on the 2015 socio-economic performance and forecasts for 2016 presented to the National Assembly (NA).

The average crude oil export price this year is US$56.7 per barrel, US$43 lower than projected early this year. Scenarios about possible impacts of the oil price on State budget revenues have been envisioned but there has been no way to avert the trend.

According to a report that the Government presented to the NA Standing Committee early this month, budget revenues would lose VND63 trillion due to the dropping oil price while tariffs from crude oil exports and fuel imports have declined.

If the oil price averages US$50 per barrel in the final three months of this year, the level of lost budget revenue would be unchanged though Vietnam National Oil and Gas Group (PVN) has pumped an additional one million tons of oil.

The January-September report of PVN projected its contribution to the State budget would fall by around VND44 trillion to only VND115 trillion compared to the estimated VND159 trillion.

The Government noted that revenue from crude oil in the nine-month period accounted for only 55.7% of the year’s target.

Therefore, the Government proposed increasing domestic collections, especially taxes and fees, as well as issuing government bonds for debt restructuring and find new capital sources to balance budget revenue and spending next year.