Chinas central government yesterday announced another round of increases of its tax on lubricants and other petroleum products – the third such increase in less than two months.
The tax increases basically offset reductions in prices for such petroleum products, according to an article by Xinhua News Service, an official news organ of the Beijing government. Tax proceeds are used to fight pollution and to support Chinas energy industry.
The most recent increases, which took effect today, raise the tax on lubricating oil, gasoline, naphtha and solvent oil to RMB 1.52 (U.S. $0.24) per liter, up from RMB 1.4 per liter. The tax on diesel, jet fuel and fuel oil was hiked from RMB 1.1 per liter to RMB 1.2 per liter.
Consumption taxes on all of those products were also raised on Nov. 29 and Dec. 13.
The central government controls prices for gasoline and diesel. Simultaneous with the announcement on consumption tax, authorities said that retail prices for gasoline and diesel would be reduced by RMB 180 per metric ton and RMB 230 per ton, respectively. Fuel prices have undergone 12 cuts since July as the government tries to stay in line with falling international crude oil costs.