China's fuel consumption tax not to affect domestically produced naphtha for ethylene production until 2010 end

22-Dec-08

In a bid to encourage energy conservation and economic reform, China's Ministry of Finance (MOF) and Ministry of Taxation have recently increased fuel consumption tax on naphtha, solvents and lubricant oil from 0.2 yuan/liter to 1 yuan/liter effective from Jan 1, 2009. However, the two ministries declared that naphtha produced within the mainland as a feedstock for ethylene and aromatic hydrocarbon products would be exempt from consumption tax until the 2010 end. Moreover, the tax payments on naphtha imported from outside for ethylene and aromatic hydrocarbon production would be returned while the naphtha not used for such purposes will be levied consumption tax.