China Raises Consumption Tax On Oil Products

　　China's finance and taxation authorities on Mondayannounced that consumption tax on oil products would be raised from Tuesday.

　　The tax on gasoline, naphtha, solvent oil and lubricating oil will be increasedto 1.52 yuan ($25) per liter from 1.4 yuan. The levy on diesel, jet fuel andfuel oil will be increased from 1.1 yuan per liter to 1.2 yuan, according tothe Ministry of Finance (MOF) and the State Administration of Taxation (SAT).

　　This will be the third increase in as many months, following one on Nov 29 andanother on Dec 13.

　　The retail prices of gasoline and diesel will be cut by 180 yuan and 230 yuanper tonne after taking the higher tax into consideration, the NationalDevelopment and Reform Commission announced in a separate statement.

　　This the 12th retail fuel prices cut since July 2014, as the government reactsto lower global crude oil prices.

　　Proceeds from the higher taxes will mainly be allocated to counter-pollutioninitiatives and the new energy sector, according to the MOF and the SAT.

　　However, experts warn that the drop in oil prices is bad news for the newenergy sector. For example, new-energy cars will see reduced sales, said LiuShangxi, director of the research institute for fiscal science at the MOF.

　　China's energy consumption accounted for about 22.4 percent of the world'stotal in 2013, but its energy consumption per gross domestic product (GDP) was3.5 times of that of the United States and seven times of that of Japan,according to Liu.

　　Fuel tax and pricing reform measures began five years ago, and have featuredconsumption tax hikes and the introduction of a pricing system more closelylinked to the international market.

　　Consumption tax was first imposed in 1994 on consumer goods with a high energycost and high pollution to make production and consumption moreenvironmentally-friendly and promote sustainable growth.

　　Over ten countries including Russia, Australia, New Zealand and France haveraised their oil product consumption tax since 2012 to ensure greendevelopment.

　　(Source: Xinhua)