China hikes fuel consumption tax amid growing pollution woes

A customer gets the tank of her car filled at a Sinopec gas station in Qingdao, Shandong province on Sept 11, 2014.  China on Friday announced a tax increase on gasoline and diesel fuel consumption in the first such hike since 2009, state m
A customer gets the tank of her car filled at a Sinopec gas station in Qingdao, Shandong province on Sept 11, 2014.  China on Friday announced a tax increase on gasoline and diesel fuel consumption in the first such hike since 2009, state media reported, amid a steep decline in crude oil prices. -- PHOTO: REUTERS

BEIJING (AFP) - China on Friday announced a tax increase on gasoline and diesel fuel consumption in the first such hike since 2009, state media reported, amid a steep decline in crude oil prices.

The measure, which takes effect on Saturday, was announced by the Ministry of Finance and the State Administration of Taxation, the official Xinhua news agency said.

China's consumption tax on petrol will go up from the current one yuan (S$0.21) per litre to 1.12 yuan and on diesel from 0.8 yuan per litre to 0.94 yuan, the report said.

The overall impact of the move on drivers will be limited as the tax rise comes as crude oil prices have fallen.

In a separate report, Xinhua said that China, the world's largest net oil importer, imports nearly 60 percent of its oil needs.

Global oil prices plummeted to four-year lows on Friday following a decision by the 12-nation Organization of Petroleum Exporting Countries (OPEC) to hold output.

OPEC decided Thursday to maintain its output ceiling at 30 million barrels per day, where it has stood for three years, sending prices plunging in an oversupplied market.

China in 1994 introduced a consumption tax on consumer goods with a high energy cost and high pollution to influence production and consumption in an environmentally-friendly direction as well as to promote sustainable economic growth, Xinhua said.