The move was made in the wake of a sharp petrol price hike in the world market while the domestic petrol subsidy funds, which are spent to lower domestic petrol prices when the Government wants to keep petrol prices stable and minimise the impacts of global increases, have almost run out.

According to the MoIT, the stabilisation of domestic petrol prices through cutting import tax, excise tax and environmental protection tax will contribute to supporting production, business and economic recovery besides controlling inflation.

Oil prices have skyrocketed since the beginning of the year on tight supplies and global recovery, with Brent crude rising more than 50 per cent this year and reaching a three-year high of US$80.75 per barrel last week.

In order to limit the increase in domestic petrol prices, the country has used the price subsidy funds, contributing to limit the product’s retail price hike in the domestic market at only 30-35 per cent, lower than the global rising rate.

To date this year, the funds have subsidised roughly VND100-2,000 per litre for oil, diesel and gasoline. Without the subsidy of the funds, the prices of the products in the domestic market would be about VND1,079-1,917 higher than currently.

However, the funds have so far been exhausted. Fourteen petrol dealers, including large Petrolimex and PV Oil, reported their funds are negative of up to thousands of billions of VND.

The MoIT, therefore, has proposed the Government cut the taxes and fees to stabilise petrol prices, contributing to supporting local production recovery and consumers.

The ministry has so far also directed large wholesale dealers such as Petrolimex and PV Oil to have detailed plans with an aim to ensure the supply of petrol to serve production and consumption in all circumstances next time.

The ministry has also required two domestic oil refineries Bình Sơn and Nghi Sơn to meet signed contracts with petrol and oil trading enterprises.

On Monday, domestic retail petrol prices continually increased by nearly VND1,000 per litre following the latest adjustment by the Ministry of Industry and Trade and the Ministry of Finance to keep domestic prices in line with the global market.

The retail price of E5RON92 bio-fuel increased VNĐ967 to a maximum of VND21,683 per litre, while that of RON95-III rose VND934 to VND22,879 per litre.

The prices of diesel 0.05S and kerosene, meanwhile, went up VND959 and VND979 to VND17,545 and VND16,622 per litre, respectively.