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Soaring oil price not blamed for late fuel tax
(Xinhua)
Updated: 2005-09-23 09:28

The soaring oil price should not be blamed for delaying the implementation of China's fuel tax, said Zhou Dadi, director of the Institute of Energy Research of the National Development and Reform Commission (NDRC) on Thursday.

Zhou made the remarks at the 2005 Summit Symposium on China Energy Strategy and Investment held here from Thursday to Friday.

As the international oil price keeps reaching new heights, it is just the time for China to take some measures to improve its energy consumption mode in a more effective way, said Zhou.

The fuel tax is one of the best weapons to check China's oil demand, he said. In press conference of the NDRC held recently, Zhang Guobao, Vice Chairman of the NDRC, said that the fuel tax has been on the agenda of the China's economic planning institution, but is till waiting for a proper opportunity such as a lower international oil price.

However, Zhou said the fundamental reason for the lagging implementation of China's fuel tax is still the interests distribution among different units, such as the transportation andtaxation institutions, the central and the local government.

The Chinese government has made a clear committment to buildinga more efficient society, which will be of great significance to the enhancement of China's economic growth mode and its economic and social development, said Zhou Dadi.

However, the road to building such a society has met many obstacles, he said. Lacking a strong enough encouraging mechanism and policy guide, energy efficiency always finds it hard to play arole in the designing and constitution of concrete policy, said Zhou.

For example, the implementation of a fuel tax has been delayed again and again out of concern that imposing a tax at a time of record-high oil prices could stun China's CPI and disadvantage thecountry's hundreds of millions of farmers at a time when there is a surging dependence on fuel imports.

The hesitant launching of the reform of the country's refined oil pricing mechanism that has brought much accusations from the country as well as the painful removal of limitations on driving autos of small emission has also raised concerns like inflation and environmental damage, Zhou said.

However, only by taking such measures could China see a reduction of the unreasonably growth of its energy demand and using energy in a more efficient way.

China's per unit energy consumption is still quite low comparedwith the average level of the world and its industrialization and urbanization process promise higher energy demand in the future.

"Therefore, China should take into account energy efficiency," said Zhou.

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