Vietnam Cuts Special Consumption Tax on Petrol to Zero, Fuel Prices Drop by Over VNĐ1,800 per Litre
Hanoi, The Gulf Observer: Vietnam has reduced the special consumption tax on all types of petrol to zero per cent with effect from November 1, resulting in a significant decline in domestic fuel prices as the Government seeks to ease cost-of-living pressures, support businesses and contain inflation towards the end of the year.
Under Government Resolution 45/2026/NQ-CP, signed on October 31, the zero per cent tax rate will remain in effect until March 31, 2027. However, the Government may shorten or extend the measure depending on socio-economic developments, energy security requirements and the need to stabilise the domestic fuel market.
According to the Ministry of Industry and Trade, the tax reduction has led to a sharp adjustment in petrol prices. The price of E5 RON 92 petrol decreased by VNĐ1,804 per litre to a maximum of VNĐ24,223 (approximately US$0.94), while E10 RON 95-III fell by VNĐ1,575 to VNĐ24,159 per litre. The revised prices came into effect at midnight on November 1.
Previously, the special consumption tax stood at 10 per cent for regular petrol, eight per cent for E5 biofuel and seven per cent for E10 biofuel under the Special Consumption Tax Law, which came into force on July 1.
The Ministry of Industry and Trade may recommend further adjustments to the Ministry of Finance, which can subsequently submit proposals to the Government in response to changing economic conditions and domestic fuel market requirements.
The latest tax relief comes amid growing inflationary pressures in Vietnam during the final months of 2026. Nguyễn Tiến Thỏa, Chairman of the Vietnam Valuation Association, said the reduction in petrol taxes, alongside a two per cent decrease in average retail electricity prices from November 1, would help ease pressure on consumer prices and support economic activities.
He noted that Vietnam’s Consumer Price Index (CPI) increased by 4.52 per cent during the first nine months of 2026, slightly exceeding the targeted level.
Thỏa highlighted that domestic consumption generally increases towards the end of the year, while accelerated public investment spending and credit growth could further intensify inflationary pressures. Volatility in international energy markets and fluctuations in exchange rates could also affect domestic prices.
He said reducing the special consumption tax on petrol to zero per cent could lower fuel prices by approximately VNĐ1,600 per litre, thereby supporting production and business operations while helping contain inflation.
Similarly, economist Ngô Trí Long of the Vietnam Financial Consultants Association observed that reductions in electricity and petrol prices would help ease overall price pressures at a time when the Government had limited room for additional inflation-control measures during the remaining months of the year.
He explained that lower energy costs would reduce production expenses for businesses and household expenditure, while helping prevent further increases in the prices of goods and services. The measures would also support the Government’s twin objectives of promoting economic growth and maintaining price stability, demonstrating its commitment to assisting businesses and consumers amid ongoing economic challenges.
Meanwhile, the Ministry of Industry and Trade reported that petrol prices in Vietnam remained significantly lower than those in several neighbouring countries as of October 31.
According to the ministry, petrol was priced at VNĐ32,550 per litre in Thailand, VNĐ32,010 in Cambodia, VNĐ48,276 in Laos and VNĐ36,125 in China, compared with a maximum of VNĐ24,159 per litre in Vietnam.
The Government’s latest initiative is aimed at providing relief to consumers and businesses, strengthening domestic economic activity and maintaining price stability amid uncertainties in the global energy market.
