Vietnam eliminates fuel tax to ease inflation pressure

Vietnam's government has zeroed out the special consumption tax on all petrol grades starting November 1, triggering significant reductions at the pump. Retail prices have fallen by more than 1,800 VND per litre in response to the tax elimination, providing relief to motorists and transport operators across the country.

The tax cut represents a fiscal intervention designed to combat inflationary pressures heading into the final months of the year. By removing the excise duty entirely, authorities aim to lower transportation costs and reduce cascading price increases across the broader economy.

The petrol price adjustment took effect from 3 p.m. on October 15, ahead of the official November 1 tax elimination date. However, diesel prices have moved in the opposite direction, rising during the same period, creating a divergence in fuel costs that may affect different sectors of the economy unevenly.

The government has also considered adjustments to electricity pricing from November 1, signalling a broader effort to manage consumer costs during a period of economic headwinds. These measures reflect policymakers' attempts to balance fiscal sustainability with the need to shield households and businesses from mounting expenses.