Vietnam slashes fuel taxes to zero percent, suspends VAT amid global oil volatility

Prime Minister Pham Minh Chinh issued Decision No. 482/QD-TTg on Thursday evening, introducing urgent fiscal measures aimed at stabilizing domestic fuel prices and safeguarding national energy security amid sharp fluctuations in global oil markets.

The policy took effect at midnight and will remain in force until April 15.

Under the decision, the environmental protection tax on gasoline, excluding ethanol, diesel, and aviation fuel, has been reduced to zero Vietnamese dong per liter.

The special consumption tax on all types of gasoline has also been cut to zero percent during the same period.

In addition, gasoline, oil, and aviation fuel are exempt from VAT declaration and payment requirements, while input VAT remains deductible.

The Ministry of Finance, in coordination with relevant agencies, proposed the measures in response to rapid and complex developments in global energy markets.

The ministry said the policy is a necessary and urgent response to severe disruptions in global supply chains driven by escalating tensions in the Middle East, involving the United States, Israel and Iran, as well as risks to key shipping routes such as the Strait of Hormuz.

These factors have pushed global crude oil prices above US$100 per barrel, increasing domestic fuel costs and placing pressure on production, business activity, and household budgets.

The ministry estimated that the tax cuts would reduce state budget revenue by about VND7,200 billion ($273.1 million) per month, saying the measures are necessary to support citizens and businesses while helping stabilize the macroeconomy.

The government also pointed to earlier actions, including Decree No. 72/2026/ND-CP issued on March 9, which reduced most favored nation import tariff rates on selected petroleum products to zero percent in an effort to diversify supply sources and strengthen market stability.

Officials said the latest measures, together with earlier policy tools, reflect the government’s commitment to maintaining fuel price stability and ensuring national energy security during a period of global uncertainty.

Following the prime minister’s decision to reduce several fuel taxes, the Ministry of Industry and Trade issued a statement late on Thursday announcing sharp cuts in fuel prices across most categories.

This marked the second consecutive steep price cut in two days, particularly for gasoline, without requiring the use of the price stabilization fund.

After the two adjustments, E5 RON92 gasoline fell by more than VND6,800 ($0.25) per liter, RON95 by over VND9,500 ($0.36), diesel by more than VND4,000 ($0.15), and kerosene by over VND5,000 ($0.18).

Following the latest revision, fuel prices were set at VND23,326 ($0.88) per liter for E5 RON 92 gasoline, VND24,332 ($0.92) per liter for RON 95-III gasoline, and VND35,440 ($1.34) per liter for diesel 0.05S.