China's fuel price and tax reform will allow prices to move more often and hand more control to companies when a basket of global crude oil prices is below $130 per barrel
China's fuel price and tax reform will allow prices to move more often and hand more control to companies when a basket of global crude oil prices is below $130 per barrel, an official source familiar with the issue said on Friday.
The reform package, which the government intends to publish for public consultation, will allow retail prices to rise 4 percent above refinery gate prices, after factoring in the cost of transport and distribution. Refinery gate prices include crude costs, processing costs and a "reasonable profit margin."
But refined oil prices will still only be allowed to fluctuate at intervals of at least 10 days and by no more than 800 yuan ($117.2) per tonne each month, or 1600 yuan within three months, the source said.
The government also intends to raise refined oil consumption tax, which will be renamed "fuel consumption tax", to replace road and waterway tolls and fees and some road charges. The relevant road charges will be scrapped on Jan 1, 2009.
The fuel consumption tax, covering seven refined products, will be raised enough to replace the revenue from the scrapped tolls, fees and charges, totalling around $24 billion a year.
Author:
Jo Amey
