A Sinopec gas station worker fills up a car in Yichang, Hubei province. [File photo: China Daily]

China released a draft plan last week to solicit public opinions about fuel taxes and pricing reforms. The reforms, which are scheduled to take effect on January 1st 2009, will further promote environmental protection, energy savings and cuts to gas-emissions.

Ren Xingzhou, an official with the Development Research Centre of the State Council believes the fuel taxation reforms will restrict unreasonable fuel consumption and help maintain a sustainable economic development.

"Crude oil and petroleum products always restrict our economic development. China is a big country with half of its oil imported from foreign countries. If we can not essentially cut back on the consumption of oil, the implementation of China's sustainable development strategy will face obstacles."

Xu Kunlin,Vice Director of the department of pricing under the National Development and Reform Commission, says the elimination of current road maintenance fees will also benefit those who seldom drive and the owners of small cars.

"For example, an average small car owner in Beijing can save more than 1,300 Yuan thanks to the abolishment of the road maintenance fee. For those bigger car owners, they can save even more."
Some experts say these reforms will also help promote the development of the oil sector and energy saving by encouraging customers to buy fuel-saving cars or use public transportation. Meanwhile it will also promote the utilization of new energy and new technology in the auto industry.

The fuel taxation and reform scheme will abolish six current fees that drivers must pay for road and waterway maintenance and management. Petrol taxes will be raised to one yuan per litre from the current 0.2 yuan; and diesel tax to 0.8 yuan per litre from 0.1 yuan.

The fuel pricing system will also cover farm vehicles and ships.