Vietnam will double its environmental tax for lubricants beginning Jan. 1, according to a resolution passed by the countrys National Assembly Standing Committee last month.
The environmental tax for lubricants will increase to 2,000 dong (U.S. $0.10) per liter.
Higher environmental tax will increase [the] base price of lubricants, hence [a] higher selling price. Furthermore, the value-added tax on environmental tax and other taxes and fees will rise due to this increased tax, making the overall retail price higher, Khanh Ngo, a consultant at Ipsos Business Consulting, told Lube Report.
According to Khanh, the price of lubricants in Vietnam is lower than in neighboring parts of Southeast Asia, but there is a high possibility that the retail price will go up in the future.
Environmental tax rates for other petroleum products like petrol, diesel and fuel oil will also increase. The increase is expected to fund government efforts to address environmental issues and raise awareness in the country.
According to the General Statistics Office, in the first half of this year, the Vietnamese economy expanded by about 7 percent. The Vietnam Automobile Manufacturers Association reported that vehicle sales volume for September increased 24 percent compared to the previous month, and increased 19 percent compared to the same month last year.