China has raised the consumption tax on oil products last week-end, to help cut emissions and boost green economy.
It is the first adjustment since the previous increase in 2009, the country’s top finance and taxation departments jointly announced last Friday 28th November 2014. The consumption tax on gasoline will rise from 1 yuan (0.16 U.S. dollar) to 1.12 yuan per liter while that on diesel from 0.8 yuan to 0.94 yuan per liter, according to the Ministry of Finance (MOF) and the State Administration of Taxation.
The National Development and Reform Commission, China’s top economic regulator, made the announcement after fine-tuning the tax that it will maintain retail fuel prices at the current level, reversing market expectations for the ninth price cut since July.
The tax raise involves other petroleum products including naphtha, lubricating oil and jet fuel, while small-displacement motorcycle, tire and ethyl alcohol were exempted from the tax to reduce burdens on the low and middle-income group.
China initiated fuel tax and pricing reforms five years ago, lifting consumption tax and launching a pricing system more closely linked with international market.
PetrolWorld 011214 Source: China State Council Information Office