Vietnam Abolishes Diesel Import Duty

Vietnam abolished the import duty on diesel on Mar 8, 2012, the Finance Ministry said, a day after it let fuel distributors raise retail prices of petrol and oil products by up to 12 percent.

The import duty on petrol and jet fuel remained unchanged at zero percent, the ministry said in a statement.

It gave no reasons for the move, but an import tax reduction was among measures the Finance Ministry often used under the pressure of price increases on global markets, the government said in a statement on its news website (baodientu.chinhphu.vn).

On Mar 7, 2012, Vietnam raised retail prices of oil products by between 3 and 12 percent, in line with a recent rise in global oil prices and to discourage smugglers, the Finance Ministry said.

Economists said the price increases, which will affect some 70 products as fuel is among the input materials for production, has raised concern over inflation and could have a negative effect on the government's 2012 inflation target.

The government aims to contain annual inflation this year at 9 percent after prices jumped 18.58 percent year-on-year in 2011. Year-on-year inflation last month slowed to 16.44 percent, below January's rise of 17.27 percent.

"I have forecast inflation will return to a high rate in March and after the fuel price increase, the high rise is almost certain now," economist Nguyen Minh Phong told Mar 8, 2012's Tuoi Tre (Youth) daily.