Securities Daily reported that PetroChina and Sinopec were rumored to have called for the raising of the threshold for the windfall tax on domestic oil and gas production to USD 70 per barrel

In addition, the two energy giants had suggested the cancellation of other special levies, such as the emissions tax, on the oil and gas sector and that such charge be imposed as part of the resources tax.

According to guidelines imposed in 2006, oil producers have to pay the special taxes once the oil price hits USD 40 per barrel. Taxes collected from the oil companies are used to subsidize downstream industries and the general public hurt by high oil prices.

The three biggest oil companies in China paid CNY 88.43 billion of windfall taxes in 2010 as the international price of oil rose.

In the first half of 2011, the amount of windfall taxes paid by PetroChina increased CNY 25.23 billion YoY while the sum paid by Sinopec rose CNY 8.8 billion. The three oil giants paid a record high of CNY 87 billion of windfall taxes in the first half of 2011.

The National Development and Reform Commission had announced in October that it will expand the scope of the resources tax to the entire country effective November 1. The tax rates on crude oil and natural gas will be 5% to 10% of the sales value.

 

Source:steelguru.com