The Ministry of Finance (MoF) has suggested prolonging tax cuts on gasoline and aviation fuel until September 30, which is three months past their planned expiration at the end of June, as indicated by a draft resolution currently being evaluated.
According to the proposal, the tax incentives now in place for gasoline and fuel-related raw materials would continue from July 1 through September 30.
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The ministry recommended prolonging the application of Decree 72/2026, which offers preferential reductions in import tariffs for specific fuel products and associated inputs.
The proposal would also preserve the current cuts in environmental protection tax and value-added tax (VAT) on gasoline and aviation fuel that were established in previous government resolutions.
The MoF stated that the extension would aid in stabilizing the local petroleum market, enhance energy security, and promote macroeconomic stability during ongoing fluctuations in global energy markets.
Starting in late March, the Government has implemented various tax relief measures for petroleum products, eliminating environmental protection taxes on gasoline, diesel, and aviation fuel, reducing the special consumption tax on gasoline to zero, and waiving VAT on those products while permitting businesses to keep claiming input tax deductions.
The measures were originally established to stay effective until June 30. In the aviation industry, preserving favorable tax rates for aviation fuel is anticipated to reduce airlines' operating expenses as global oil prices continue to vary. In earlier talks about fuel tax policy, multiple lawmakers called on the Government to prolong the measures until the conclusion of 2026, or at minimum until September 30, contending that an extended period would offer more certainty for businesses and consumers.
Local retail fuel costs have consistently decreased in recent pricing cycles.
E10 petrol is now available at VND20,750 (8.1 cents) per litre, and diesel is priced at VND23,530 (9.2 cents) per litre, marking the lowest prices seen in almost three months.
Yet, costs are still 5.9-33.8 percent above levels prior to the onset of the Middle East conflict.
The MoF states that domestic fuel prices might rise by 43-67 percent, depending on the specific product, if all petroleum-related taxes, excluding the SCT on petrol, were promptly reverted to their pre-conflict levels. This scenario might contribute around 0.78 percentage points to the average consumer price index (CPI) this year, increasing pressure on inflation management goals.
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With the suggested extension of tax exemptions until September, not accounting for the reintroduction of the SCT on petrol, retail prices for E5 and E10 would increase by approximately 7-8 percent, whereas diesel prices would mostly stay the same.
The MoF stated that the proposal balanced inflation management, energy supply stability, and the gradual recovery of budget revenues. Keeping the MFN import duty at zero would enable fuel importers to broaden their supply sources beyond ASEAN markets, lessening reliance on conventional suppliers.
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According to the proposal, the updated measures would be implemented from July 1 to September 30. The Ministry of Industry and Trade may suggest changes to the execution timeline as needed, based on market changes and macroeconomic management needs.