Govt To Mull Cut In Excise Tax To Reduce Price Of Fuel

Source: Vientiane Times

The government will consider cutting or even waiving excise tax on the price of imported oil, to reduce skyrocketing prices at petrol stations.

Minister of Finance Bounchom Ubonpaseuth told a meeting on Wednesday there was a possibility that the government would halve or even waive excise tax, the Vientiane Mai newspaper reported.

A proposal in this regard will be submitted to the government for consideration and approval, the minister told the meeting, which discussed ways to lower the soaring price of fuel.

If the proposed reduction is approved, the excise tax charged on diesel, which is currently 21 percent, would be lowered to 11 percent. The excise tax on regular grade petrol, which is currently 31 percent, would be cut to 16 percent.

“If the price [of petrol] continues to rise much higher, excise tax might be cut altogether,” Mr Bounchom was quoted as saying, referring to the possibility of the proposal being endorsed.

Mr Bounchom and the Minister of Industry and Commerce, Dr Khampheng Xaysompheng, co-chaired the meeting, which was attended by relevant officials and petrol trade operators.

There have been multiple increases in the price of oil on the global market since late 2021, caused by several factors including conflicts between world powers, the Lao Economic Daily quoted Dr Khampheng as saying.

As a result, the price of fuel has risen to its highest level in 10 years. On March 9, petrol cost US$150 a barrel and diesel cost US$180 a barrel, he added.

In response to the continuing surge in the global oil price, the government has been forced to adjust prices accordingly. Since the start of this year, the price has increased eight times and been reduced just once.

Rising fuel prices have driven up production and transport costs, thus pushing up the price of goods and the inflation rate, which has had a significant impact on people’s standard of living.    

In light of this issue, the government has instructed the two ministries to hold talks with oil trading businesses to explore ways to lower the price of fuel and ease the burden on industry and consumers.