China to put fuel tax in place next March

Shanghai. September 27 (Gasgoo.com) - China will put fuel tax in place in March 2008 after the proposal being debated for seven years, according to a governmental official.

"It's time to collect the fuel tax,” said Rao Da, secretary general of China Passenger Car Association earlier this month.

The upcoming fuel tax will be used to replace all other driving-related charges, like gasoline tax, highway maintenance fee, tolls on highway, bridge and tunnel and transport management fee.

Currently, all the fees are still collected separately and oil prices in China are significantly lower than international standard.

This fuel tax is applauded by a vast number of private car-owners in China. The new policy means for those who drive less won't pay the same annual fees as those who drive a lot. To put it simply, when you drive less, you spend less.

On the other hand, the new policy will be punitive to those who drive a lot because they have to pay much more on gas. Therefore, the new policy encourages private-car owners to drive less.

"If the fuel tax is put in place, my driving costs will be doubled,; therefore I’d like to choose not to drive," said a Shanghai resident who drives VW Polo.  
 
Industrial analysts say the long-expected fuel tax will cut the soaring oil consumption and save the worsening environment; automaker relying heavily on sales of fuel-thirsty vehicles will turn green, would have to improve the fuel economy; and private car owner will have more incentives using the public transportation.