Vietnam cuts fuel import tax to 0% until next month

Under the decree, issued on Monday, the most-favored-nation import tax on unleaded motor gasoline and blending inputs such as naphtha and reformate is cut from to zero percent from 10 percent.

Diesel, fuel oil, jet fuel, and kerosene tariffs drop to zero percent from seven percent.

Petrochemical inputs including xylenes, condensate, and p-xylene fall to zero percent from three percent, while other cyclic hydrocarbons decrease to zero percent from two percent.

The Ministry of Finance estimated that based on 2025 import volumes, the tax cuts could reduce state budget revenue by about VND1.024 trillion (US$39 million).

The decree states that if necessary, the Ministry of Industry and Trade may propose extending the measure to ensure market stability.

Officials said global energy prices have surged due to the escalating conflict involving the U.S., Israel, and Iran in the Middle East, which erupted on February 28.

A blockade of the Strait of Hormuz, which is located between Oman and Iran and carries around one-fifth of oil consumed globally as well as large quantities of liquefied natural gas, could prevent about 20 million barrels of crude per day from reaching refineries, especially in Asia, forcing plants to cut output and limit exports.

Vietnamese refineries may also face difficulties if crude imports are disrupted.

Currently, most of Vietnam’s fuel imports come from ASEAN countries and South Korea at zero tariffs under free trade agreements.

However, tightening global supply could make alternative sources scarce and more expensive.