The Ministry of Finance of Vietnam November 16 decided to slash gas import tariffs to zero percent from two percent in a bid to keep domestic market stable so as to curb national inflation threat, state media reported.
This is the second time the ministry has applied tax reduction in a move to stabilize prices within this month. The first tariff cut decision was taken effect from November 10, local Labor newspaper said.
The decision, to be effective from November 20, comes out in the circumstance that the world gas prices are estimated to escalate by US$50-US$80 per ton in the near future as a result of global oil price hike, gas supply scarcity, and world increasing demand, the ministry said.
Recently, the ministry hoped that the validity of its decision to cut import taxes from five percent to two percent would help slash local gas prices by between VND6,000-VND7,000 per cylinder of 12 kilograms in the near future, if the global oil rate continues standing at US$742.5 per barrel. However, only some traders reduced gas retail prices by VND4,000 per 12-kg canister.
Since mid-September, gas traders in Vietnam have applied price hikes for five times, adding VND25,000 to each 12-kg cylinder to between VND230,000 and 250,000, depending on suppliers, compared to the rates in early month due to oil price escalation in the world market.
According to the General Statistics Office (GSO), consumer prices rose 8.12 per cent on-year since the beginning of this year due to high prices of input materials and fuel in the world.
Vietnam will be determined to rein CPI rise at 0.3 per cent in the remaining months. This means the country will try to keep inflation rate at 8.4 per cent, still lower than the estimated GDP growth rate at 8.5 per cent for the whole year, said Deputy Prime Minister Nguyen Sinh Hung.
Vietnam, which has to spend billions of U.S. dollars to import petroleum products due to the absence of big oil refineries, is estimated to use up nearly one million metric tons annually in coming years. In 2006, the country consumed around 800,000 tons with about 60 per cent being imported. (Investment & Finance)
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