Fuel tax 'needs no further legislative approval'

By Cui Xiaohuo (China Daily)
Updated: 2008-11-26 07:18

The levying of a proposed fuel tax does not need further approval from the country's top legislature, a senior official has said amid worries that the levy will add significantly to rising costs.

The Highway Law, revised by the National People's Congress (NPC) in 1999, "has already empowered the State Council to impose the tax at a proper time", the senior official with the State Administration of Taxation told the Shanghai Securities News on Monday.

The remark from the unnamed official has also reportedly fanned speculation that the tax, aimed at encouraging the use of fuel-efficient cars, will be announced as early as Dec 1.

Analysts have said the tax may increase driving costs by about 4 percent.

"The government could slash fuel prices by 20 percent before levying a 30 percent tax for the use of fuel," Zheng Jun, an analyst with China Securities, told China Daily Tuesday.

Although drivers may not need to pay for full toll and road maintenance fees after the fuel tax is in place, a number of car owners reportedly worried that they may need to pay more for driving.

Complaints have piled up since global oil prices slid below $50 a barrel in recent weeks from their peak of nearly $150 in July, with Chinese car users reportedly unhappy over how the government-set fuel prices have not gone down in accordance with worldwide prices.

A total of 1,773 car owners nationwide filed a petition to the National Development and Reform Commission (NDRC) via a Beijing-based lawyer on Sunday, Liu Jiahui, the lawyer representing the car owners, told China Daily Tuesday. The motorists said the levying of the tax should go through the NPC. They also asked the government to lower fuel prices "immediately" and to hold a forum on the tax.

"While the government ponders over how to tax car owners for using fuel, it should not postpone lowering oil prices along with the global market. Now, the drivers' rights are in jeopardy," Liu said.

In anticipation of higher driving costs, fuel prices have reportedly been rising and car owners have been filling up.

Wholesale prices of gasoline were up 20 yuan ($3) a ton in Shandong province last Friday, following the NDRC's announcement that it was mulling over the levying of the fuel tax. Diesel rose 350 yuan a ton to 6,100 yuan, news portal People.com.cn reported Tuesday.

On Monday, drivers at a petrol station in Xi'an, capital of Shaanxi province, bought 10 percent more gasoline than usual.

"Most of them filled their tanks to the brim," an employee at the station was reported as saying by the website.