VietNamNet Bridge – Last week, several ministries could not reach an agreement on retail petrol prices and import tariffs. They considered two options: raise the import tariff and cut the petrol retail price, or leave the import tariff unchanged and cut petrol prices sharply.

The Ministry of Finance (MOF) and the Ministry Industry & Trade (MOIT) on January 21 released a decision in the morning to raise the import tariff to the ceiling level - to 40 percent. This was signed by the Deputy Minister of Finance.

Then, two decisions were made in the afternoon, including one on lowering the petrol retail price and another on postponing the import tariff increase.

Local newspaper editorial boards on the same morning received a notice about an import tariff increase of five percent on petrol, kerosene and mazut oil, starting from January 21.

The notice surprised local reporters, because they had heard the Minister of Finance Dinh Tien Dung say on the afternoon of January 20 that the import tariff increase to the ceiling level would not occur.

“The import tariff will not be raised,” Dung told VietNamNet.

“We reported this to the government this morning. The import tariff will be the same. If the oil price continues to fall, we will have to reconsider the ceiling level,” he said.

“I am always on the consumers’ side,” Dung said. The minister believes that the crude oil price decrease is good news for the economy because it can help reduce enterprises’ production costs.

However, while the minister confirmed the information with the press, a decision on a tax increase was sent by MOF to MOIT on the afternoon of January 20.

MOIT, after receiving the decision, projected petrol price decreases of VND729-1,444 per liter, starting from 3 pm on January 21.

However, MOIT later received a notice that the import tax increase was postponed as ordered by MOF Minister Dung, and therefore, it had to plan another petrol price adjustment.

Finally, the petrol price was lowered by about VND1,900 per liter, starting from 4 pm on January 21.

Analysts commented that MOF’s Minister Dung had tried to protect his reputation when deciding to remove the import-tariff increase decision.

Respected economists all said they had asked the Prime Minister not to raise petrol import tariffs, despite the sharp oil price decreases.

Dr. Nguyen Dinh Cung believes the oil price decrease presents a golden opportunity for the economy to recover. Enterprises should be given opportunities to minimize their production costs, which would help them boost sales.

Dr. Tran Dinh Thien also noted that only when demand recovers will the national economy fully regain its strength.

Pham Huyen