Việt Nam cuts fuel tax to zero, petrol prices fall by up to VNĐ1,800 per litre

Việt Nam cuts fuel tax to zero, petrol prices fall by up to VNĐ1,800 per litre

Việt Nam cuts petrol tax to 0 per cent, with prices falling by up to VNĐ1,804 per litre from November 1.

A customer fills up his motorbike at a Petrolimex station in Hà Nội. Petrol prices fell sharply from November 1, following the Government’s decision to cut the special consumption tax on petrol to 0 per cent. — VNA/VNS Trần Việt

Việt Nam has cut the special consumption tax on all types of petrol to 0 per cent from November 1, with retail prices falling by more than VNĐ1,800 per litre following the tax cut, as the Government moves to ease fuel costs and curb inflationary pressures towards the end of the year.

Under Government Resolution 45/2026/NQ-CP, signed on October 31, the 0 per cent tax rate will apply until March 31, 2027.

The tax reduction has triggered a sharp adjustment in domestic petrol prices, with E5 RON 92 falling by VNĐ1,804 per litre to no more than VNĐ24,223 (US$0.94), while E10 RON 95-III dropped by VNĐ1,575 to VNĐ24,159 per litre, according to the Ministry of Industry and Trade.

New prices took effect at midnight on November 1.

The special consumption tax had previously stood at 10 per cent for regular petrol, 8 per cent for E5 biofuel and 7 per cent for E10 biofuel under the special consumption tax law, which took effect on July 1.

According to the Government, the validity of the new resolution could be shortened or extended depending on socio-economic developments, energy security requirements and the need to stabilise the domestic fuel market. The Ministry of Industry and Trade may propose adjustments to the Ministry of Finance for submission to the Government.

The latest tax cut comes as Việt Nam faces mounting inflationary pressures in the final months of the year.

Nguyễn Tiến Thỏa, chairman of the Vietnam Valuation Association, said the reduction in petrol taxes, alongside a 2 per cent cut in average retail electricity prices from November 1, would help ease pressure on consumer prices and support economic activity.

The consumer price index rose 4.52 per cent in the first nine months of 2026, slightly above the target, he said.

Domestic consumption typically rises towards the year-end, while faster public investment disbursement and credit growth could add to price pressures. Meanwhile, international energy market volatility and exchange-rate fluctuations could also affect domestic inflation.

Thỏa said cutting the special consumption tax on petrol to 0 per cent could reduce fuel prices by around VNĐ1,600 per litre, supporting production and business activities while helping contain inflation.

Ngô Trí Long, an economist at the Vietnam Financial Consultants Association, said the energy price cuts would help reduce pressure on the overall price level at a time when room for inflation control in the final months of the year remained limited.

He said lower electricity and petrol prices would help businesses reduce input costs and households save on living expenses, while easing upward pressure on the prices of goods and services. The measures would support the Government’s twin goals of promoting economic growth and controlling inflation, while demonstrating its support for businesses and consumers amid ongoing economic difficulties.

The Ministry of Industry and Trade said Việt Nam’s petrol prices remained lower than those in neighbouring countries as of October 31. Petrol prices stood at VNĐ32,550 per litre in Thailand, VNĐ32,010 in Cambodia, VNĐ48,276 in Laos and VNĐ36,125 in China, compared with no more than VNĐ24,159 in Việt Nam. 

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