World Bank asks China to levy fuel tax earlier

According to the latest report from World Bank focusing on the subject of China highway development, the construction cost of China highway will come to as much as $225 billion and a big void for fund will become a problem within the coming 15 years. If the fund relies too much on bank loans, China expressway may need charge a higher passing fee, as a result impact the efficiency of road usage.

Currently 50% of the maintenance and construction cost come from bank loan and 35% from the government fund. Insiders say if the road cost can be paid by fuel tax, the higher fuel price will lead to higher car price, which in turn will influence the stable development of the whole auto industry.

The suggestion of World Bank may but be implemented in a short term. Fellow of Development Research Center of State Council P.R. China Chen Qingtai said the road maintenance fee in China is charged by local government, and once the fee is replaced by fuel tax, the problem of harmonizing the relationship between the central and local government will emerging. Only after this problem is solved can we begin considering the policy of levying fuel tax.