Prime Minister Pham Minh Chinh has instructed the trade and finance ministries to study the possibility of lowering the environmental tax on fuel amid surging prices.
The Ministries of Industry and Trade and Finance need to make a submission on this by February 28, he said.
The environmental tax on the popular RON 95 gasoline is currently VND4,000 per liter ($0.18) or around 15 percent of its retail price. The ratio is similar for the biofuel E5 RON 92.
It is one of several taxes on gasoline, the others being special consumption tax (8-10 percent), import tax (8 percent) and value-added tax (10 percent), which add up to 42-43 percent of the retail price.
The environmental tax cut will be determined by the Standing Committee of the National Assembly after looking into the proposal from the government.
A reduction in the tax is said to help cool down gas prices, which are now at a historic high.
Nghi Son, one of the country’s two refineries, cut production recently due to a cash crunch.
Following a price hike on Monday, the latest in a series, gasoline prices are up 12.8 percent this year.
Following reports of shortages in some places, especially in the south, the government is set to auction 102 million tons of RON 92 gasoline from the national reserves this month to increase supply.
Chinh said since gasoline and diesel are sensitive goods which have a large impact on consumer sentiment, their prices must be strictly regulated in accordance with the laws.
“The Ministry of Industry and Trade must ensure there is no shortage of gasoline and diesel”.