On February 21, petrol prices set a new record after the Ministry of Industry and Trade and the Ministry of Finance decided to increase the price of all kinds of petrol and oil.
Accordingly, the price of gasoline E5 RON92 rose by 960 VND/liter to 25,530 VND/liter. Petrol RON95-III rose by 960 VND/liter to 26,280 VND/liter. The prices of kerosene, diesel oil and mazut oil also increased several hundred VND per liter.
Previously, the record petrol price was set on June 23, 2014. At that time, petroleum companies listed the selling price of RON 95 petrol at 25,730 VND per liter and 25,230 VND/liter for RON92 gasoline. This record has now been broken.
Currently, a liter of gasoline is subject to many taxes, such as import tax, luxury tax, environmental protection tax, and value-added tax besides a number of other items that are not taxes, but are included as the basis for calculating petrol and oil prices.
Specifically, the petrol price structure is added with eight items, including taxable CIF price (imported gasoline price + transportation cost), import tax (10%), value added tax (10%), special consumption tax (10% for RON95 gasoline and 8% for E5 gasoline), and environmental protection tax (3,800 VND for E5 petrol, 4,000 VND for RON 95 petrol).
In addition, there are business costs (1,050 VND/liter for RON95 gasoline and 1,250 VND/liter for E5 gasoline), profit (300 VND/liter) and stabilization fund (300 VND/liter, but fluctuating according to actual situation).
Of the four taxes on gasoline, the environmental protection tax is the highest, “attached” to a fixed amount, instead of a percentage like many other taxes. Therefore, regardless of whether the price of gasoline drops or rises sharply, the environmental protection tax cost per liter of gasoline remains the same.
In March 2020, when the price of gasoline plummeted, only 12,560 VND/liter of RON95 gasoline, the tax rate then accounted for 49% per liter of RON95 gasoline and 47% per liter of E5 gasoline.
Mr. Tran Duy Dong, Director of the Domestic Market Department (Ministry of Industry and Trade), said that if the price of gasoline continues to escalate, besides using the price stabilization fund, another tool must be taken into account, which includes taxes and fees.
“If gasoline prices are too high, it will disable a number of tools and policies being implemented in the economic recovery program, including a 2% VAT reduction,” said a representative of the Ministry of Industry and Trade, adding that the use of tax and fee tools should be considered because the petrol price stabilization fund is limited.
The Ministry of Industry and Trade has consulted with the Ministries of Finance and Planning and Investment over a plan to auction more than 100 million liters of RON92 gasoline, which is used to produce bio-fuel E5, in the national reserves.
Oil prices have increased sharply in recent days following the tension between Russia and the West over Ukraine. The high price of oil and fears of an escalation of war have hit commodity and financial markets.
Domestic petrol prices have hit an eight-year record high following the latest price adjustments made on February 21, dealing a heavy blow to ongoing recovery efforts of firms that have borne the brunt of the prolonged COVID-19 pandemic.