Vietnam’s finance authorities are proposing temporary zero import tariffs on several fuel products, a move aimed at protecting domestic supply and prices as geopolitical tensions disrupt global energy markets.
According to a draft decree submitted by the Ministry of Finance (Vietnam), the plan would reduce the most-favored-nation (MFN) import tariff to 0% on gasoline, diesel, jet fuel, and several petrochemical inputs.
Officials say the policy is designed to ensure stable fuel supply and strengthen national energy security during a period of volatile global oil prices.
Global Conflict Driving Market Uncertainty
The ministry cited growing instability in global energy markets, particularly due to escalating tensions involving the United States, Israel, and Iran, which have affected oil production, logistics, and international supply chains.
Such disruptions have already led to sharp price swings in global oil markets, with knock-on effects for Vietnam’s domestic fuel supply.
Although Vietnam imports a large share of refined fuel from ASEAN countries and South Korea under free trade agreements with 0% tariffs, officials warn that supply from those sources could tighten if the geopolitical situation worsens.
Maintaining existing tariff barriers for imports from other markets could therefore limit Vietnam’s ability to secure alternative fuel supplies.
Tariffs on Key Fuel Products Could Drop to Zero
Under the proposal, several import duties would be temporarily cut:
Gasoline and blending components
Refined fuel products
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Diesel: 7% → 0%
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Fuel oil: 7% → 0%
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Jet fuel: 7% → 0%
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Kerosene: 7% → 0%
Petrochemical feedstocks
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Xylene, condensate, and p-xylene: 3% → 0%
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Other cyclic hydrocarbons: 2% → 0%
If approved, the measure would remain in effect until April 30, 2026.
Fiscal Impact on Government Revenue
The Ministry of Finance estimates that applying the new tariff rates based on 2025 import volumes would reduce state budget revenue by approximately:
Officials argue that the fiscal cost is justified if the policy helps stabilize fuel supply and prevent larger economic disruptions.
Fuel Prices Already Climbing
The proposal comes as Vietnam experiences significant increases in retail fuel prices.
Recent adjustments set the national price caps at:
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E5 RON92 gasoline: VND25,226 per liter
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RON95-III gasoline: VND27,047 per liter
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Diesel: up to VND30,239 per liter
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Kerosene: up to VND35,091 per liter
Some products have risen by VND3,700–VND8,400 per liter in the latest price revision.
A Strategic Move to Protect Energy Security
Vietnam relies heavily on imported refined fuel to meet domestic demand, even as it operates large refineries such as Dung Quat Oil Refinery and Nghi Son Refinery and Petrochemical Complex.
By removing tariffs temporarily, policymakers hope to give energy importers greater flexibility to source fuel globally, helping shield the domestic economy from supply shocks.
The draft decree is currently under review before a final decision is made.
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Source: Vietnam Insider