Planner says Jan 1 best date to start fuel reform

Shanghai, December 5 (Gasgoo.com) Jan. 1 would be a good date to start reforms of China's fuel taxation and pricing system, a top Chinese economic planning official said on Thursday, according to a Reuters report.

"I personally think Jan. 1 is the best date," Zhang Xiaoqiang, deputy head of the National Development and Reform Commission, told reporters, adding that details of the planned reform would be unveiled within a few days.

China hasn't adjusted its pump prices since June, but world oil prices have slumped more than 60 percent from a record $147 a barrel hit in July. Consumers are waiting for the government to follow the global market trend and cut fuel prices before introducing any fuel tax.

The Chinese government is likely to place a cap on retail prices, which means state control is only necessary when the crude oil prices exceed $130 per barrel. Refiners would have more room to adjust prices in this case, the Reuters report said.

In principle, prices should reflect the scarcity of resources, the supply-and-demand balance and the environmental and ecological costs of producing the fuel, but China's current oil product prices do not do these adequately, Zhang said.