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Vietnam revises oil product tariffs   2010-01-26 - Reuters

Vietnam revises oil product tariffs
 
   
Vietnam has narrowed the prices used to calculate oil product import tariffs by switching to a Platts 30-day average of Singapore WTI crude oil prices, a move traders said would not immediately impact demand.

 

The Platts spread is $45 to $95 a barrel, compared to tariffs in place since last April based on crude oil prices that ranged between less than $53 a barrel to more than $118 a barrel.

“The new directive was issued to increase proactive management and regulation of tax policy on oil products,” the government said in a statement.

If crude oil prices move beyond the range, the finance ministry will issue separate tariff guidelines. But the tariff will not exceed 40 percent in any case, the statement said.

Traders did not expect the tariff revision to have a huge impact on Vietnamese oil products demand.

“I don’t think they would necessarily come to the market to buy more, as they have already contracted what they need via term deals, and we’re not hearing of any dramatic increase in their demand,” said an Asian distillates trader.

US crude oil is expected to rise to an average of $77.50 a barrel in 2010, a Reuters poll of 29 market analysts showed, up from $76.40 a barrel in December.

State oil and gas group Petrovietnam said early this month it expected crude oil export prices this year to edge up to an average $65 per barrel from $64 last year.

Vietnam’s top oil products importer Petrolimex has already committed up to 1.5 million tons of gasoline for 2010 delivery and up to 2 million tons of diesel for the year, both of which would meet 40-50 percent of its needs this year.

It has also bought around 84,000 tons of spot gasoline for January delivery and another 83,200 tons, or 80 percent of the 104,000 tons of automobile fuel it was seeking for first-quarter delivery.

“Overall, import demand is mainly linked to consumption,” said another trader, adding that the newly revised tax structure should have limited impact on the decisions to import.

“Also, to have a tax structure following crude prices can be more of a hindrance than a blessing. Sometimes oil products prices go in opposite direction from crude,” he added.

Below are the new range of Platts WTI Crude prices, based on which Vietnam will tax its oil product imports.

Platts prices ($/barrel) Petrol, kerosene, aviation fuel Diesel, fuel oil
From 45 to below 60 30 25
From 60 to below 75 25 20
From 75 to below 95 20 15


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