China to charge producers oil tax

BEIJING, Dec. 7 (UPI) -- China will charge its top oil producers more than $8 billion in taxes this year.

The nation's oil producers, including Sinopec, PetrocChina Co. and CNOOC Ltd. will all pay additional taxes on their windfall from high oil prices.

That is 33 percent more than the Chinese oil producers paid last year, the National Development and Reform Commission said.

Chinese government introduced the oil levy in March 2006 as crude prices began to climb, charging oil producers an additional tax on each barrel of oil they sell for more than $40. Crude oil peaked at a record-high $99.29 a barrel on Nov. 21.

The government said it will use the windfall tax payments to subsidize refiners and other industries whose fuel costs have surged. The promised subsidies were announced earlier in the week with no indication of where the funding would come from. Since the government controls fuel prices to prevent inflation from accelerating, refineries have been losing money since increase in crude began and a it's causing a shortage at gas stations across the country.