HANOI: Vietnam’s gasoline imports from South Korea could see an increase this year, following a reduction in import duty since December last year, trade sources said Friday. “Vietnamese oil importers are now rushing to South Korea for their gasoline … after the import tax [is cut to] 10%,” a Vietnamese importer said.
Under the Free Trade Agreement with South Korea, Vietnam has cut the import tariff on gasoline imports from South Korea to 10% effective December 20, 2015, from 20% previously. The 10% import tax on gasoline from South Korea is expected to remain in place till 2018. “We expect more gasoline cargoes from South Korea,” a second Vietnamese oil products importer added.
According to Platts data, the country’s largest oil products importer Petrolimex has recently bought a total of about 150,000 mt of 92 RON gasoline for end-October to February loading from South Korea through four spot tenders.
Of this, about 90,000 mt gasoline, in three equal size cargoes, are for loading over January-February. Petrolimex typically buys most of its 92 RON and 95 RON gasoline cargoes from Southeast Asian countries like Singapore or Malaysia.
Fellow oil products importer Saigon Petro has issued a buy tender Friday, seeking 10,000 mt of 95 RON gasoline for March, and have for the first time, added South Korea as an alternative loading port to Singapore, Malaysia and Thailand. Since January 1, 2015, Vietnam has implemented separate import tariff structures on oil product imports based on whether the products come from countries it has FTAs with.
As for countries it has FTAs with, Vietnam has further levied different import tax rates over 2015-2018 under three agreements, namely: the ASEAN Trade in Goods Agreement, or ATIGA, the ASEAN-China and the ASEAN-Korea FTAs.
Under ATIGA, Vietnam has removed import taxes on diesel, kerosene and fuel oil effective January 1, 2016. It has kept the import tariff on gasoline at 20%, which will be removed from 2018. Under the FTA with China, Vietnam’s import tax on gasoline is set at 20% for gasoline, 10% for jet fuel, 8% for diesel, and 10% for kerosene over 2015-2018. As for the FTA with South Korea, diesel, jet fuel and kerosene are levied with an import tax rate of 5% over 2015-2017, and this will be abolished from 2018.
According to Vietnam Customs data, Singapore was the biggest oil product supplier in 2015, with 3.85 million mt, up 48.5% from 2014, followed by Thailand at 2.26 million mt, up 164% and China at 1.76 million mt, up 4.6%. Oil product imports from South Korea fell 33.9% year on year to 343,794 mt in 2015.