How to lower the price of petrol?

Environmental protection tax on gasoline and oil has been reduced by 50% since the beginning of April, but according to experts, it is still like "salt out of the tank" in the face of rising world prices.

Within 2 months, the retail price of gasoline in the country has peaked twice. Most recently, on May 11, each liter of RON95 gasoline increased to VND 29,980, the highest in history. The increase in domestic selling price is explained by the operator in the same direction as the world price movement, but the increase margin is lower by 1-3%.

Gasoline prices are close to 30,000 VND per liter and may increase further if world prices are still on an upward trend, which will affect consumption, economic recovery and inflation. If gasoline prices increase by 10%, inflation will increase by 0.36 percentage points and growth by 0.5 percentage points.

With the current increase, Mr. Nguyen Bich Lam, former Director of the General Statistics Office, commented that the average petrol price will increase quite high, directly affecting transportation, fishing and consumption.

Mr. Lam said that the operator needs to review and recalculate the cost levels in the base price structure of gasoline and taxes and fees to control the increase of this fuel.

Currently, each liter of gasoline delivered to consumers has to carry 38-40% of taxes and fees and is made up of the CIF price of imported finished petroleum products, and special consumption tax (10% for RON95 gasoline, E5 biofuel) RON92 is 8%), import tax 10%, value added tax 10%, environmental protection tax 1,900 - 2,000 VND. In addition, the standard profit, standard cost, transportation cost... accounted for 5-8%. Environmental protection tax on gasoline and oil has been reduced by 50% from the beginning of April to the end of this year.

Executive comment if only relying on tax reduction is not fundamental, but Dr. Nguyen Quoc Viet, Deputy Director of the Institute for Economic and Policy Research (VEPR), said that special consumption tax, value added tax (VAT) VAT) with gasoline are two taxes that can be considered to reduce in the short term to cool down domestic gasoline prices. Currently, the tax rate (special consumption tax, VAT) applied for each liter of gasoline is 10%.

"The reduction of indirect taxes in the short term will be more flexible than absolute tax reduction such as environmental protection tax, helping to control output and increase prices of goods and services; and better recover the economy after the epidemic," he said. state a point of view.

Expert Ngo Tri Long also agrees, lowering the price of gasoline only depends on the tax "valve". However, he noted, the executive agency must carefully study and have a plan to offset budget revenue if this tax is further reduced.

Deputy Minister of Industry and Trade Do Thang Hai said that the ministry is working with the Ministry of Finance to review and study whether any additional taxes can be reduced in the retail price structure to lower gasoline prices. However, the reduction of any tax "needs to be appropriately calculated to combat petrol and oil smuggling and create conditions for businesses to use this fuel as input for production and people's needs".

In the ASEAN region, Laos is the country with the second highest gasoline prices, after Singapore. Currently, each liter of gasoline in this country is 1,742 USD, equivalent to 40,226 VND. To keep gasoline prices in check, the National Assembly of this country on May 9 passed a resolution to reduce excise tax on gasoline by nearly half for 3 months. The tax rate after reduction for gasoline is 16%, oil is 11%.

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