China, the world's second-largest energy
consumer, needs to adjust a windfall tax levied on the country's oil
producers after crude oil prices rose above US$100 (HK$780) a barrel, an
official from the country's main planning body said.
The tax's trigger level of US$40 a barrel is "too low," Hu
Weiping, oil and gas director at the National Development and Reform
Commission's energy bureau, said in an interview in Shanghai yesterday.
Chinese oil producers pay a tax on revenue from crude sold for more
than US$40 a barrel under a levy introduced in March 2006, based on a
global crude price of about US$60. Crude in New York soared to a record
US$119.90 a barrel on April 22 and is up 78 percent over the past year.
China's oil companies are facing "very heavy" operational
pressures, Hu said.
PetroChina (0857), the nation's largest oil producer, said on March 19
its 2007 bill for windfall taxes rose more than fivefold to 15.7 billion
yuan (HK$17.6 billion).
Government caps on diesel and gasoline prices led to PetroChina's
refining and marketing division losing 20.7 billion yuan last year, the
company said at the time, as crude costs increased.
While the commission's view is that the tax should be adjusted as early
as this year, the Ministry of Finance has the final say on the change, Hu
said.
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