Vietnam's Ministry of Finance has decided to raise the import tax for oil products by 2 percentage points, and ordered local oil companies to cut retail prices with effect from April 26, the ministry said Friday.

The import tax will be raised to 16% from 14% for gasoline; to 12% from 10% for diesel; and to 14% from 12% for kerosene and fuel oil, the ministry said, without providing an effective date in the statement.

This is the second import tax hike in April, with the last adjustment made April 18.

Meanwhile, the ministry ordered local oil companies to cut retail gasoline prices by at least Dong 301 ($0.01)/liter, diesel prices by at least Dong 90/l and kerosene prices by at least Dong 81/l. The price of fuel oil is not affected.

This is the third price cut for oil products in April, and comes amid a fall in international oil product prices, the ministry said.

Though oil suppliers in Vietnam are allowed to set their own prices, any adjustment requires the finance ministry's approval.

Gasoline prices were reduced to Dong 23,830/l for 95 RON and Dong 23,330/l for 92 RON, both down by Dong 310/l or 1.3%.

Diesel prices were reduced to Dong 21,250/l for 0.05% sulfur diesel and to Dong 21,200/l for the 0.25% sulfur grade, both down Dong 100/l or 0.4%.

The company's kerosene price was cut by Dong 100/l, or 0.4%, to Dong 21,300/l, while fuel oil prices were unchanged at Dong 18,750/kg for 3% sulfur 180 CST fuel oil, 18,450/kg for 3.5% sulfur 180 CST fuel oil and Dong 18,350/kg for 380 CST fuel oil.

Most of the remaining 12 oil companies in Vietnam made the same price adjustments late Friday, resulting in similar prices nationwide.

Around 70% of Vietnam's oil product demand is met by imports, with the remainder supplied by the country's sole 6.5 million mt/year refinery at Dung Quat.

Source: Platts