On May 23, the Inter-Ministry of Industry, Trade and Finance adjusted gasoline prices according to the cycle. Accordingly, the price of RON 95 gasoline is 30,650 VND/liter (up 670 VND/liter); E5 RON 92 gasoline is 29,630 VND/liter (an increase of 680 VND/liter). Thus, the price of gasoline has exceeded 30,000 VND / liter, to the highest level ever.
Regarding this issue, responding to the press on the corridor of the National Assembly, National Assembly delegate Nguyen Thi Suu (Deputy Head of the National Assembly Delegation in charge of Thua Thien – Hue province) said that the galloping increase in gasoline prices is as follows: today will have a strong impact on the background economy Vietnam, therefore, needs effective solutions to reduce.
“The most important are input costs and inflation control. Currently, there is still room to control gasoline prices, but there is a trade-off between reducing budget revenue and controlling the increase in gasoline prices.”Ms. Suu said.
Ms. Suu analyzed that the increase in gasoline prices was influenced by world prices and the war between Russia and Ukraine. However, Vietnam still has to be proactive about the supply, in order to ensure the domestic petroleum supply, to serve the needs of people and businesses. To do so, it is necessary to review and re-evaluate the efficiency of domestic oil fields and refineries.
On the other hand, Ms. Suu stated that it is necessary to reduce some fees that make up the price of petrol. For example, the excise tax on gasoline must be calculated to reduce, but how to reduce it to balance revenue and expenditure is a matter of careful consideration.
“In order to have room to reduce gasoline, I think it is necessary to calculate the increase in excise tax collection for some service industries, tourism, restaurants, hotels, and entertainment activities, because these industries have back to work“, suggested Mrs. Su.
As for the environmental protection tax on gasoline, Ms. Suu said that it is difficult to reduce further because this tax has already been reduced by 50%. If further reduction is to underestimate the story of the environment, disrupting the ecological balance, this must be avoided because Vietnam is aiming for NetZero by 2050.
Gasoline prices have continuously increased recently, causing special attention to the public. According to economic expert, Dr. Nguyen Bich Lam, former director of the General Statistics Office, gasoline costs account for about 3.52% of the total production costs of the whole economy. According to calculations, a 10% increase in gasoline prices will reduce GDP by about 0.5% – a rather large reduction, reflecting the very strong impact of gasoline price fluctuations on economic growth.
In addition, the domestic economy is highly dependent on imported raw materials from outside, with the proportion of cost of imported materials in the total cost of raw materials of the whole economy at 37%. When the world gasoline price increases, it will increase the price of imported and domestic raw materials.
Meanwhile, Mr. Tran Duy Dong, Director of the Domestic Market Department (Ministry of Industry and Trade), predicted that petrol prices this year are likely to move in an upward direction, especially when the domestic supply is still unstable. As a result, the world’s petroleum supply chain was disrupted.
In the management of petroleum products, the Inter-Ministry of Industry and Trade – Finance continuously monitors the movements of world prices to continue to make recommendations related to tax and fee issues. Recently, the inter-ministerial department has also mentioned the review of even the MFN tax (ie the most favored nation tax rate), with a proposal to reduce it from 20% to 12%.
However, the reduction must be calculated so that it can be harmonized in the negotiation process with other countries, while keeping the proportion of revenue sources, encouraging supply diversification, but also creating a difference between the FTA market tax rates. with markets with MFN tariffs.
Previously, a representative of the Domestic Market Department said that if gasoline prices continue to rise, tax reduction solutions should continue to be considered. If the price of gasoline fluctuates more strongly, the Ministry of Industry and Trade has taken the initiative in the scenario, specifically, if the price is 130 USD, 150 USD/barrel, it will propose a scenario to continue reducing taxes on gasoline, such as environmental tax. school, special consumption…
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