On the increase of the threshold of the special oil income levy by the Ministry of Finance of the PRC to US$55 per barrel with effect from 1 November 2011, Citigroup says in its research report that it expects 10-16% positive impact on the three major Hong Kong-listed stocks, with PetroChina (SHA:601857, HKG:0857) being the one most geared.

Citigroup estimates a 16% positive impact on PetroChina's full-year earnings, 9.9% to Sinopec Corp (HKG:0386) and 9.5% to CNOOC Limited (HKG:0883)

The brokerage firm now makes PetroChina its top pick among the three large-cap China oil stocks instead of Sinopec Corp, which has been top pick until this point, due to PetroChina's higher sensitivity to the tax cut and Sinopec Corp's recent outperformance.