Although the moves should give refiners a bigger margin from international sales of naphtha and gasoline, Beijing has kept a quota system that helps guarantee domestic supplies by limiting how much fuel can be sold abroad. China had suspended tax rebates 11 percentage points of the 17% value-added tax charged on gasoline exports from Sept. 1 to Dec. 31 to make it less profitable to export certain oil products. The moves came after pumps ran dry across southeast China. As there is no extension, it means the rebates have resumed, a finance ministry source told Reuters. If there had been new measures we would have announced it before they began.
The official said the resumption had not been announced because the suspension had lapsed automatically, and rebates would continue at the same rates as in 2005. The naphtha rebate was 13 percentage points of the 17% value added tax payable. Refiners had responded to the measures in the fourth quarter by cutting back sharply on gasoline exports, but they have resumed robust overseas sales in January as domestic stocks now appear plentiful. A 6 percent tariff on imported diesel, waived in the last quarter of 2005 as harvest and heating needs stretched supplies, was also reinstated at the start of this year, a Beijing-based industry official said.
There is no policy to extend the preferential policy into the new year. For January at least, Sinopec will have to pay for the import duty, said the official.