Vietnam is moving to scrap import tariffs on petroleum and related products, a measure intended to secure domestic energy supplies as conflict in the Middle East threatens global oil shipments. Officials stated the proposed changes aim to head off potential shortfalls as regional supply tightens.
The Ministry of Finance has submitted recommendations to lower the Most Favoured Nation (MFN) import tariffs on various fuel goods and their inputs to zero. This proposal follows the blockage of the Strait of Hormuz—a critical route for international oil transport—which has intensified supply anxieties.
The situation has already restricted the passage of about 20 million barrels of crude oil per day from the Middle East, forcing many Asian refineries to curb output, dip into reserves, and scale back exports. These hurdles have hit price-sensitive countries in the region particularly hard, leaving them more exposed to volatility and supply interruptions.
Vietnam’s fuel market has felt the strain as some local refineries face challenges sourcing adequate crude oil imports to cover contractual obligations. While government officials maintain that current domestic inventories remain stable, they cautioned that continued disruption through April could present further difficulties.
Authorities have moved to conserve available crude for Vietnamese refineries and have instructed the Ministry of Industry and Trade to secure supply lines.
While Vietnam’s bulk of fuel imports previously arrived from ASEAN states and South Korea under existing free trade arrangements with zero tariffs, the potential for restricted access has increased as these markets experience their own constraints.
In anticipation, the Ministry of Finance is advancing plans—initially proposed by the Ministry of Industry and Trade—to bring MFN tariffs on unleaded gasoline and blending inputs down from 10% to zero. Similar reductions, from 7% to zero, are proposed for diesel, fuel oil, jet fuel, and kerosene.
Petrochemical feedstocks, such as xylene, condensate, and p-xylene, would see tariffs cut from 3% to zero, while other cyclic hydrocarbons would drop from 2% to zero.
The drafting agency estimates that, based on import activity in 2025, these reductions could lead to a decrease in state revenue of around VND 1.024 trillion. The new regulations are slated to be enacted from the signing date through April 30, 2026, with the option for extension pending review by the relevant ministries and further government approval.
