Crude oil has dwindling share in Vietnam's state budget revenue. (Photo: Internet)
Vietnam’s Ministry of Finance (MoF
) has drawn up scenarios to ensure budget collections in case oil prices fall to $60, $50, $45 or even $30 a barrel, Deputy Finance Minister Do Hoang Anh Tuan said in an interview with national broadcaster Vietnam Television on December 13.
The price of crude oil in the international market has dropped to as low as $36 a barrel, the lowest in more than six years.
Regarding this, the deputy minister said that such a price is for future delivery and will not affect the country’s state budget revenue in 2015. Vietnam has collected some 66 trillion dong (roughly $3 billion), which has met the revised target.
He noted that the amount collected from crude oil now accounts for just 6% of the nation’s budget revenue and is even lower than the tax arrears, which stay at 76 trillion dong ($3.4 billion). “Revenue from crude oil no longer has a decisive share as it did five to 10 years ago.”
The deputy minister pointed out that low oil prices will also benefit the Vietnamese economy.
Vietnam is projected to import between 12.5 million and 13 million ton of petroleum products in 2016. “If the price of crude oil hovers around $36 a barrel, we will be able to save from $2 billion to $2.1 billion,” Mr. Tuan said.
He analyzed that lower oil prices will pull down input costs for domestic production, which in turn, will benefit businesses and locals, and help increase budget collections.
The MoF said in a press release earlier this month that the country’s state budget revenue amounted to 860.1 trillion dong ($38.23 billion) in the 11 months through November, meeting 92.7% of the plan reported to the National Assembly and increasing 8.3% year-on-year.
Of the sum, revenue from crude oil was 60.57 trillion dong ($2.7 billion dong), or 99.3% of the revised plan, as selling prices averaged $57 a barrel, compared to the initially projected $100 a barrel.
Meanwhile, state budget expenditures totaled 1,015.7 trillion dong ($45.14 billion) in the 11-month period, or 88.5% of the whole-year plan, rising 7.4% from a year earlier. The amount includes 142.4 trillion dong ($6.33 billion) spent on repayments of debt and aids.
The fiscal deficit in the period was 155.6 trillion dong ($6.92 billion), meeting 68.8% of the plan.