SINGAPORE: Vietnam’s top fuel importer, Petrolimex, and Kuwait Petroleum Corp. (KPC) have ended their long-standing diesel term contract that dates back to the 1990s since imports from Southeast Asia now attract lower duties, two industry sources said.
On top of the recently implemented trade deal covering the Association of Southeast Asian Nations (ASEAN), which makes it cheaper for importers to buy fuel from other ASEAN countries, Vietnam is moving toward cleaner fuel, the sources said.
“Vietnam won’t be able to lift cargoes from Kuwait due to the tax issue as the difference between ASEAN and non-ASEAN is 5 percent,” one of the sources said.
Under the ASEAN trade deal, which took effect in Vietnam from January, the import tax on diesel from ASEAN members was lowered to 5 percent, compared with 10 percent on diesel from non-ASEAN countries.
Under the contract, KPC supplied 840,000 cubic meters, or about 5.3 million barrels, of diesel a year. Of this, 560,000 cubic meters was 0.25 percent sulphur diesel and 280,000 cubic meters was 500 ppm sulphur diesel, one of the sources said.
Petrolimex and KPC end diesel term contract
