Vietnam halved its Most Favored Nation (MFN) tariff on gasoline to 10% Monday as it seeks to diversify supply.
The MFN import tariff is a standard rate applied for trade between World Trade Organization (WTO) members unless a separate trade agreement exists.
But the cut is unlikely to reduce gasoline prices since Vietnam imported over 90% of its fuel from ASEAN member countries and South Korea under free trade agreements (FTAs) at 8% tariff.
But it will reduce Vietnam’s dependence on those sources and help diversify its supply.
Taxes account for 19.4-22% of gasoline prices in Vietnam, lower than in many other countries.
After four downward adjustments in recent days a liter of RON 95 gasoline now costs VND25,600 ($1.09), the lowest since late-February.