NDRC: 2007 special oil gain levy to top 60b yuan

Payments collected under the special oil gains levy in the first three quarters totaled 41 billon yuan (US$5.54 billion) and are likely to reach 60 billion yuan by the end of the year, Shanghai Securities News reported, citing a newly released announcement by the National Development and Reform Commission (NDRC).

Fuel prices have been reset four times this year. In the latest move the NDRC raised oil, diesel, and jet fuel prices by 500 yuan per ton, or 10 percent, to guarantee domestic refined oil supplies and promote energy conservation. Subsequently, fees for railway, airplane and other transport services went up in line with the price increase, generating extra profits for oil refineries.

The special oil gain levy, introduced in March 2006, aimed to allot a certain proportion of refineries’ profits to the poor, helping them cope with rising fuel prices. To date this year, 42 billion yuan has been used to subsidize public transport, taxi drivers, farmers, and poor urban households.

As crude oil prices soar, many experts believe China has entered an era of high fuel costs, reiterating the importance of saving energy and improving efficiency.

An executive from NDRC said China will continue to reform the fuel pricing system, enabling it to reflect the state of demand and supply and environmental costs by consuming these fuels. He suggested applying fuel taxes, encouraging energy saving vehicles, and restricting vehicles with high pollution.