April 16 – China announced that value-added tax on gasoline and diesel imported by China National Petroleum Corporation (CNPC) and China Petrochemical Corporation (Sinopec) between April 1 and June 30 will qualify for a 17 percent tax refund in the second quarter. The move aims to relieve CNPC and Sinopec’s refining loses and ensures that the local market is supplied with adequate refined oil products.

“The tax rebate will reduce the refining losses of CNPC and Sinopec to some extent,” Zheng Zhiguo, an energy analyst with Shenyin Wanguo Securities told China Daily, “But the amount is small and cannot fully cover the losses.”

The Ministry of Finance detailed that CNPC tax imports on 500,000 tons of gasoline and one million tons of diesel will be refunded as well as Sinopec’s imports of 500,000 tons of gasoline and 1.5 million tons of diesel.

Domestic oil producers have been suffering losses due to rising crude prices in the global market.

In addition, the price of refined oils products is strictly-regulated by the government forcing refineries to decrease production to cope with escalating costs.

According to Custom figures, for the first two months of 2008, the country purchased 5.95 million tons of refined oil products. The figure is a 17.7 percent from last year.