As a result, import tariffs on kerosene and diesel have been reduced from the previous 5 percent to 3 percent.

Import taxes on gasoline and jet fuel have been cut to zero percent, compared to the previous 4 percent.

The move is expected to assist local petroleum traders in their business amid rising global fuel prices in recent months.

Local market watchdogs said that the imported price of 92 octane petrol (A92) in the Singaporean market had increased to an average US$125.94 per barrel for February deliveries, up 5.18 percent compared to a month earlier.

This means that the retail prices of A92 should stand at VND23,332 (US$1.11) per litre instead of current VND20,800 (US$0.99).

With the rising import prices, several domestic petrol traders are bemoaning losses of over VND1,000 per litre of petrol sales.

Dang Vinh Sang, General Director of Saigon Petro Limited Company, said the firm is facing mounting difficulties. According to him, Saigon Petro has to lower their commissions to agents to only VND350 per litre, instead of the previous VND650 per litre.

Several other wholesale traders, including the state-owned Vietnam National Petroleum Corp (Petrolimex), the country’s biggest petroleum trader, are also in the same situation with Saigon Petro.

Petrolimex Deputy General Director Vuong Thai Dung said the current retail prices of petroleum in the domestic market are between VND1,300 and VND2,400 per litre lower than the imported prices depending on different products.