Vietnam has announced plans to remove import tariffs on fuels temporarily as global oil supplies face disruption due to the ongoing conflict in the Middle East. The government said this move aims to stabilize domestic fuel prices and ensure energy supply amid soaring costs.
The tariff removal is expected to last until the end of April, according to a statement released on Sunday. The Ministry of Finance is preparing the necessary resolution for official approval.
Surge in Fuel Prices Hits Vietnamese Consumers
Fuel prices in Vietnam have already seen sharp increases since the conflict began in the Middle East. Domestic prices for the most commonly used gasoline have risen by 21 percent, reaching 27,040 Vietnamese dong per liter, the highest since July 2022. Diesel prices have surged even more, climbing over 50 percent.
Currently, Vietnam imposes a 10 percent import tariff on unleaded gasoline and a 7 percent tariff on diesel, aviation fuel, and kerosene. The new plan would temporarily eliminate these tariffs, allowing companies to import fuel at lower costs and pass some relief on to consumers.
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Some fuel stations across the country have already reduced operating hours or temporarily shut down due to limited supplies, although widespread shortages have been avoided so far. The tariff removal is expected to help stabilize the domestic petroleum market and support businesses in securing enough fuel for their operations.
Global Conflict Disrupts Oil Supply
The government’s action comes as the war involving the United States, Israel, and Iran disrupts global energy markets. One of the main concerns is the Strait of Hormuz, a key shipping route through which about 20 percent of the world’s crude oil flows.
Any prolonged blockage of the strait could sharply limit international oil supply, causing prices to rise further. Vietnam’s Ministry of Finance warned that if the conflict continues and the strait remains blocked, alternative oil sources could become scarce, putting additional pressure on domestic fuel prices.
Vietnam relies heavily on imported oil, and the rising costs are already affecting everyday commuters and businesses. By temporarily removing import tariffs, the government aims to ease the burden on consumers while maintaining the country’s energy security during this turbulent period.
The measure is expected to reduce state revenue by 1.02 trillion dong (around $39 million), but officials described it as necessary to support the domestic market and prevent supply disruptions.
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Government Steps to Ensure Fuel Stability
The Ministry of Finance has drafted a decree outlining the temporary tariff cuts, but the plan still requires formal approval by the government. If approved, the tariff removal would remain in place until the end of April, providing a window for businesses to secure fuel supplies and for the domestic market to stabilize.
The government emphasized that the measure is designed to support businesses in proactively sourcing fuel, while also helping to keep energy prices under control for consumers.
This action comes as Vietnam faces one of the fastest rises in fuel costs in recent years. The decision to temporarily remove import tariffs is seen as a direct response to the global oil supply shocks triggered by the conflict in West Asia.
For now, fuel stations, businesses, and consumers will monitor the impact of these temporary measures as the government works to navigate the ongoing uncertainty in global oil markets.
Vietnam’s move to remove fuel import tariffs highlights the country’s efforts to protect its economy and citizens from sudden international shocks. While domestic fuel prices remain high, this step offers a short-term relief solution and ensures that fuel supply continues during a period of global instability.