Ba Ria – Vung Tau Customs: Revenue collection plummets with oil price

Supervising import and export goods at Petroleum Port, Ba Ria-Vung Tau Province. Photo: Nguyễn Huế

The BR-VT Customs Department said in the first months of 2020, the crude oil price plummeted to around $30/barrel, even in the period when the rate was at negative point, it adversely affected the revenue collection of the unit. In the first six months, the revenue collected from exported crude oil was about VND 1,556 billion. It is expected that in 2020, the total amount of crude oil exported through BR-VT border gates will be 4.6 million tonnes, higher than 2019 by 1.1 million tonnes. However, due to a sharp decline in crude oil prices, revenue collected from this item is expected to reach only VND 2,480 billion, down VND 550 billion compared to 2019 (VND 3,030 billion).

According to Vung Tau port Customs Branch, exported crude oil was the item accounting for the largest amount of revenue collection of the unit (in previous years, revenue collected from this item accounted for 88-92% of the total).

However, from March 2020, the price of crude oil began to plummet and drop to its lowest level in history. The average price of crude oil in April 2020 was only $31.52/barrel, compared to the same period last year of $74.48/barrel. The average crude oil price in the first four months of 2020 was $47.52/barrel compared to the same period in 2019 when it was $65.51/barrel.

The record-breaking reduction of oil price has greatly affected tax collection of this item as well as State revenue at the Vung Tau Port Customs branch this year. According to the department's statistics, by the end of May, revenue collected from the export of crude oil was only a touch over VND 53 billion, down 50% compared to April and lower than the same period in 2019 by seven times.

Along with the decrease in revenue collected from crude oil, there is a decline in revenue collected from imported petroleum - the second item accounting for the largest revenue collection at Vung Tau port Customs Branch. The volume of imported petrol this year also decreased sharply compared to the same period last year.

In the first four months of 2020, the volume of imported gasoline with tax was 12,045 tonnes, down 74% from the same period last year (46,396 tonnes). Revenue collected from this item in the first four months of 2020 was VND 15,649 billion, down 93.64% compared to the same period last year (VND 245.887 billion). With the decrease of these two items as mentioned above, revenue collection of the Vung Tau Port Customs Branch in 2020 is forecast to reach about VND 3,063 billion, down 24.08% compared to the same period last year (VND 4,035 billion).

In terms of imported petroleum products, the BR-VT Customs Department said the import volume of petroleum in 2020 is expected to be 501,000 tonnes, with a total turnover of $209 million, down 68% in volume and 77% in value. The estimated revenue collected from this product in this year is only about VND 774 billion, down VND 1,119 billion compared to 2019 (VND 1,973 billion).

Besides the above items, in 2020, revenue collected from many other import and export items in the province of BR-VT will also decline sharply.

Iron and steel products tended to decline sharply in the first six months and will continue to decrease in 2020 due to a decrease in domestic demand for raw materials and iron and steel products. Expected revenue collected from this item in 2020 is only VND 3,675 billion, down 14% compared to 2019.

Revenue collected from agricultural products (corn, palm oil, soybean meal, wheat) is estimated at VND 1,770 billion, down VND 471 billion compared to 2019 (VND 2,241 billion); imported machinery and equipment in the first six months reached VND 368 billion, down 55% over the same period. It is estimated it will reach VND 736 billion in the whole year, down 53% compared to 2019.

From import and export in the area, BR-VT Customs Department estimated revenue collected from import and export in the first six months at the unit would be VND 7,900 billion, reaching over 39% of current appropriation, decreasing nearly by 20% from the same period. For the whole year, revenue collected from import-export activities at the unit will exceed VND 16,800 billion, 80% of the current appropriation, down 16% compared to 2019.