Laos
Laos Reinstates Higher Fuel Taxes as Emergency Measures Conclude
The Lao government has restored higher excise taxes on fuel, signaling a shift back to regular taxation after emergency measures aimed at curbing inflation.
On June 24, Laos reinstated higher excise taxes on fuel, with the Ministry of Industry and Commerce announcing a return to regular tax rates. The tax on regular gasoline increased from 15 percent back to 25 percent, while the diesel tax was raised from 0 percent to 5 percent. This adjustment follows temporary tax cuts implemented in March to alleviate rising fuel prices and inflation driven by global oil market fluctuations.
As a result of the tax increase, retail fuel prices in Vientiane Capital were adjusted on June 25. Regular gasoline is now priced at LAK 30,690 (approximately USD 1.38) per liter, diesel at LAK 24,560 (about USD 1.11), and premium gasoline at LAK 35,840 (around USD 1.62). Notably, premium gasoline will now be priced separately based on its own Cost, Insurance and Freight (CIF) value, with customs duties and excise taxes applied as per existing laws.
The recent tax changes follow emergency measures enacted on March 17, when the government reduced the excise tax on regular gasoline from 25 percent to 15 percent and eliminated the diesel tax entirely to mitigate transport and living costs. These temporary measures were set to remain until June 30, contingent on the stabilization of global oil prices.
In conjunction with the tax adjustments, the Lao government is pursuing longer-term energy reforms aimed at enhancing fuel security, which has been a pressing issue due to supply disruptions earlier this year. The country heavily relies on imported petroleum, with around 92 percent of its refined fuel sourced from Thailand. In June, Laos signed a fuel supply agreement with Thailand's state-backed PTT Group to ensure more stable cross-border petroleum supplies.
The government has also been exploring diversifying its fuel sources. In May, Russia indicated it might consider its first-ever petroleum exports to Laos via Vietnamese ports. Additionally, Laos is promoting electric vehicle adoption and reviewing fuel subsidies as part of its broader energy strategy.