Vietnam to remove fuel tariffs as Iran war disrupts oil supply

Vietnam is considering eliminating tariffs on fuel imports as the ongoing U.S.-Israeli war with Iran disrupts global oil supplies and drives prices to their highest levels since 2022, the government said.

The finance ministry announced on Sunday that it has drafted a decree to reduce import tax rates to zero on certain petroleum products. The move is aimed at stabilizing the domestic market and protecting national energy security amid rising global fuel costs.

In a statement, the ministry warned that if the conflict continues and the blockade of the Strait of Hormuz persists, alternative fuel supplies on international markets could become limited, increasing the risk of further price spikes. About one-fifth of the world’s crude oil passes through the strategic waterway.

Since the conflict began more than a week ago with U.S. and Israeli strikes on Iran, fuel prices in Vietnam have risen sharply, prompting the government to activate emergency pricing measures.

The price of the country’s most widely used gasoline grade has climbed 21 percent to 27,040 Vietnamese dong (about $1.03) per litre, the highest level since July 2022, according to state media reports.

Under the finance ministry’s proposal, which still requires government approval, the temporary tariff exemption would remain in effect until the end of April.

The escalating crisis in the Middle East has pushed global crude prices to nearly $120 per barrel, marking their highest levels since Russia’s invasion of Ukraine in early 2022.