Vietnam’s oil product imports are limited by brimming domestic storage tanks, as high inflation caused a slump in consumption despite recent fuel price cuts, traders and industry sources said.

Asia’s second-largest importer of petrol and diesel could buy even less oil products should import tariffs be reimposed, or if a special fuel consumption tax come into force, the sources added.
Vietnam, faced with sky-high inflation of nearly 30 per cent in August, trimmed retail petrol prices twice last month amid a retreat in crude prices, but sources in Vietnam said the cuts had done little to boost consumption.
“Salary hasn’t increased while the consumer price index is still so high. Our (oil storage) tanks are still full now,” said a source at a Vietnamese state oil importer.
Fuel costs directly contribute 2.58 per cent to Vietnam’s consumer price index basket.
The popular 92-octane grade gasoline currently sells for 17,000 dong ($1.03), down from 18,000 dong before the most recent price cut but still almost 25 per cent higher than at the beginning of the year.
At this price level, sources said there was little incentive for its neighbours in Indochina to purchase motor fuels from Vietnam, further slowing its imports and dampening the regional market already weighed down by abundant gasoline and diesel.
The state-controlled online newspaper VNExpress quoted the finance ministry as saying it was considering to reinstate a 5 per cent import tax on petrol.