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China to levy full consumption tax on fuel oil
Shanghai. February 20 (Gasgoo.com) - China's Ministry of Finance and State Administration of Taxation has begun to levy full consumption tax on fuel oil and naphtha as of January 1 of 2008, Shanghai Securities News reported, citing the finance ministry's announcement.
Under the new taxation policy, government will impose a tax rate of 0.10 yuan a liter for fuel oil and 0.20 yuan for lubricating oil and naphtha, which is used as a petrochemical feedstock and blending component for gasoline.
"This policy will create a lot of pressures on oil manufactures and sales companies," said an official of a fuel oil wholesale company in Shanghai. "Our profit margin will be narrowed by the new taxation policy.”
Industry insiders say most fuel oils and naphtha can be used directly as petrol or diesel and the purpose of the new taxation policy is to prevent tax evasions and tighten control over energy consumption.
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