<article><p class="lead">Vietnam, a typical destination for South Korean gasoline, could look towards Southeast Asia as a gasoline supply source in 2021 as Vietnam adjusts its import tax structure, said market participants.</p><p>Vietnam is expected to reduce import taxes for gasoline cargoes from southeast Asia and South Korea to the same level in 2021. The Form D and Form KV certificates that prove the gasoline cargo originated from southeast Asia and South Korea respectively, will be subjected to a preferential import tax of 8pc in 2021, according to Asian refiners. Non-Form D or Form KV cargoes will have to pay an import tax of 20pc.</p><p>This will mostly impact the gasoline market as Form D and Form KV cargoes had not been subjected to import taxes for jet fuel, gasoil, fuel oil and kerosine. Vietnam imported 32,500 b/d of gasoline in during January-October, according to Vietnam's customs data.</p><p>This comes at a time of increasing refining capacity in southeast Asian after the start of 175,000 b/d refinery in Brunei owned by private-sector firm Hengyi and Malaysia's Pengerang Refining and Petrochemicals' 300,000 b/d refinery, a 50:50 joint venture between Malaysia's Petronas and Saudi Aramco.</p><p>Only cargoes with Form D certification with bill-of-lading date from 1 January 2021 will be subjected to the lower tax rate but environmental protection fees are expected to increase, said refiners. </p><p>Form KV cargoes have been taxed significantly lower than Form D cargoes and the change in import tax will impact trade flows. Vietnam accounted for 13.8pc of Korean gasoline exports at 26,500 b/d in January-October compared to just 1pc of Singapore's gasoline exports at 5,500 b/d, according to GTT customs data.</p><p>Vietnamese importers such as Petrolimex have been paying a premium above market for fob South Korean gasoline because of the preferential import tax but that premium will be eroded when the new import tax rate sets in. </p><p>South Korean refiners are already seeking new export destinations such as Australia, which recently announced plans to close some refineries and to review closures. BP announced last month that its <a href="https://direct.argusmedia.com/newsandanalysis/article/2155162">146,000 b/d Kwinana refinery</a> in Western Australia would close next year and convert into an import terminal. Australian Viva Energy, the owner of <a href="https://direct.argusmedia.com/newsandanalysis/article/2133609">128,000 b/d Geelong refinery</a> in Victoria and <a href="https://direct.argusmedia.com/newsandanalysis/article/2162305">Ampol's 109,000 b/d Lytton refinery</a> are also considering the long-term viability of their respective plants.</p><p>South Korea is an exporter of non-oxy gasoline, while Australia imports mainly non-oxy gasoline. South Korea exported about 22,000 b/d of gasoline to Australia during January-October.</p><p class="bylines">By Aldric Chew</p></article>
