The Government of China has started exacting the full rate of consumption tax for fuel oil and naphtha.
The new rates under the scheme issued by the Government will charge 0.10 and 0.20 yuan a liter for diesel and naphtha respectively.
These two products are used as petrochemical feedstock and blending component for gasoline.
Consumption tax at the same rate was imposed even earlier in 2006, and thereafter a cut of 70 percent for both the products was allowed. However, the Government has decided to continue the previous trend in an effort to restrain resource-intensive sectors and promote proper utilization of energy.
Experts believe that these measures have been taken to ease exports to create domestic demand and stabilize prices in China.
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