Vietnam Proposes 0% Import Tax Extension on Petroleum to June 30, 2026

Overview

The Ministry of Finance has submitted a draft to the Ministry of Justice proposing to extend the validity of Decree 72, which sets a 0% preferential import tax rate on certain petroleum products and raw materials, from its current expiry of April 30 to June 30, 2026. This extension, estimated to reduce state budget revenue by an additional VND 997 billion, directly affects major importers and refiners like Petrolimex (PLX) and Binh Son Refining and Petrochemical (BSR), aiming to ease supply chain pressures from ongoing Middle East conflicts.

Key Facts

• The Ministry of Finance proposes extending the 0% preferential import tax rate on petroleum and raw materials from April 30 to June 30, 2026.
• The extension is estimated to reduce state budget revenue by an additional VND 997 billion (~$39.88 million USD), bringing the total revenue reduction since the policy’s implementation to VND 2,021 billion.
• The draft also recommends expanding the list of items eligible for the 0% rate (instead of 5%) to include three raw material codes for production at the Nghi Son Refinery and Petrochemical plant.
• According to the General Department of Customs, Vietnam spent nearly $3 billion on petroleum imports in Q1 2026, up 78% year-on-year.
• Current retail prices as of the report: RON 95-III gasoline at VND 23,760 per liter and diesel at VND 31,040 per liter, up approximately 18% and 61% respectively since late February 2026.
• Other taxes on petroleum, such as environmental protection tax, value-added tax (VAT), and special consumption tax, have already been reduced to 0% until the end of June 2026 under a National Assembly resolution.

What Happened

According to a draft submitted by the Ministry of Finance to the Ministry of Justice for review, the government proposes to extend the validity of Decree 72, which amended the Most-Favored-Nation (MFN) import tax rates for certain petroleum products and raw materials. The current 0% rate, which applies to items like naphtha, reformate, and condensate, is set to expire on April 30, 2026. The Ministry argues that businesses are currently negotiating shipments for May and June, and the uncertainty makes it difficult for them to plan imports, sign contracts, and stabilize production amid the unpredictable Middle East conflict.

The drafting agency stated that the 0% import tax rate, in effect since early March 2026, has allowed enterprises to access alternative supply sources as traditional supply chains from markets like South Korea and ASEAN were disrupted due to military conflicts. This has helped ensure domestic supply, contributing to stabilizing the petroleum market and the macroeconomy. However, the Ministry notes that even if the military conflict ends, oil and gas infrastructure in the Middle East would require at least 5-7 weeks to restore capacity, and discontinuing the 0% MFN rate from late April could lead to renewed supply shortages.

Market Context

Petrolimex (PLX), listed on the Ho Chi Minh Stock Exchange (HOSE), and Binh Son Refining and Petrochemical (BSR), listed on the Hanoi Stock Exchange (HNX), are directly impacted as major players in Vietnam’s petroleum import and refining sectors. As of April 15, 2026, PLX closed at VND 40,000 per share, down 0.50% with volume of 2.68 million shares, while BSR closed at VND 26,000 per share, down 0.38% with volume of 11.03 million shares. The proposed tax extension comes against a backdrop of significant fuel price increases and heightened import costs, with Q1 2026 petroleum imports surging 78% year-on-year to nearly $3 billion.

Strategic Significance

For long-term investors, this policy extension underscores the government’s continued intervention to manage fuel supply security and input cost pressures for refiners and importers. By maintaining the 0% import tax, the state aims to provide temporary relief to companies like PLX and BSR, potentially improving their near-term margin outlook by reducing tax burdens on imported raw materials. This aligns with broader efforts to stabilize domestic fuel prices and support economic activity, though it shifts fiscal costs to the state budget, with an estimated VND 997 billion in foregone revenue.

What to Watch

• Final approval and issuance of the amended decree by the government, expected before the current policy expires on April 30, 2026.
• Q2 2026 financial results from PLX and BSR to assess the impact of the extended tax policy on import costs and profitability.
• Updates on the Middle East conflict and its duration, as cited by Petrolimex and BSR as a key factor requiring at least 5-7 weeks for supply chain recovery post-conflict.
• Monthly petroleum import value data from the General Department of Customs to monitor trends in supply and cost.
• Retail fuel price adjustments by the Ministry of Industry and Trade and the Ministry of Finance in response to global market movements.