China eyes cut to crude import tax rebate -report
BEIJING, Sept 2 (Reuters) - China might cut by nearly half a tax rebate on crude imports, as a domestic fuel price hike and easing global oil prices revive the refinery balance books it was designed to soothe, a business paper reported on Tuesday.
The tax rebate, which currently covers three-quarters of a 17 percent value-added tax (VAT) on crude imports, might be cut to just 40 percent of the VAT charge, said China Business News, citing several unnamed sources familiar with the situation.
"The specified subsidy amount is set according to changes in international crude prices and refining losses," the report quoted a senior official with top refiner Sinopec (SNP.N) (600028.SS) as saying.
In the second quarter of this year, Sinopec was awarded a total subsidy of 22.93 billion yuan ($3.35 billion) and 3.07 billion yuan ($448.8 million) in value-added tax rebates for imports of refined oil products.
But its quarterly earnings still plunged 87 percent to 2.2 billion yuan ($322 million).
The Sinopec source said that the government was now mulling a cut in the subsidy because Beijing had raised gasoline and diesel prices by nearly 20 percent in late June, easing pressure on refiners that were being forced to sell at loss-making state prices.
Global crude markets Clc1 have also sunk from a July high of over $147 a barrel, to trade at just over $109 on Tuesday, reducing feedstock costs. ($1=6.840 Yuan) (Reporting by Beijing newsroom; Editing by Emma Graham-Harrison and Ken Wills)
