Chinese oil producers to pay $8 billion in windfall taxes in 2007
platts.com
Singapore (Platts)--7Dec2007
China will charge oil producers Yuan 60 billion ($8.08 billion) in
windfall taxes this year on soaring crude prices, up 33% from Yuan 45 billion
charged last year, the China Daily reported Friday.
Windfall tax payments reached Yuan 41 billion in the first three quarters
of 2007, the China Daily said, citing figures from a statement released by the
country's top economic policy planner, the National Development and Reform
Commission.
China introduced the oil levy in March 2006 as crude prices advanced,
charging oil producers the additional tax on each barrel of oil they sell for
more than $40. Light sweet crude futures on the New York Mercantile Exchange
were trading at a little above $90/barrel on Friday.
The government uses the windfall tax payments to subsidize refineries and
other industries whose fuel costs have surged, the NDRC said. China controls
the price at which refiners retail their products. Since these prices are set
way below international levels, the government subsidizes refiners.
China paid Yuan 21 billion in subsidies last year and payments so far
this year have reached Yuan 42 billion, according to the NDRC.
PetroChina, Sinopec and CNOOC are the nation's three biggest oil
producers. PetroChina and Sinopec are also China's two biggest refiners.
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India revises 2007-08 oil subsidy bill estimate up to $17.6 bil
platts.com
Singapore (Platts)--6Dec2007
The Indian government and its oil companies are expected to collectively
subsidize domestic oil products sales to the tune of Rupees 697 billion
($17.64 billion) in the fiscal year ending March 2008, an upward revision from
the Rupees 549.35 billion estimated before the November run-up in benchmark
oil prices.
Of the total, Rupees 336 billion will go toward subsidizing kerosene sold
to the poor through the public distribution system and domestic LPG. The other
two products sold at prices capped by the government are gasoil and gasoline.
The central government would foot 42.7% of the subsidy bill by issuing
"oil bonds" to the state refiners and marketers, Deora said. About 33% will be
met by the government-controlled upstream companies such as Oil and Natural
Gas Corp., GAIL and OIL. The balance would have to be absorbed by the oil
marketers, he added.
The government in April extended the kerosene public distribution scheme,
the domestic LPG subsidy scheme and the subsidy for far-flung areas for
another three years, to April 2010. This would see the central budget
subsidizing PDS kerosene by Rupees 0.82/liter and LPG by Rupees 22.58 per
cylinder, Deora told the Lok Sabha, the lower house of parliament.
PDS kerosene was currently sold at Rupees 9.09/liter (23 cents/l) in
Delhi, against a market price of Rupees 24.39/liter (61.7 cents/l) if based on
average world market levels over April-November 2007, Deora said.
LPG retailed at Rupees 294.75 for a 14.2-kg domestic cylinder
($525.49/mt), against its international equivalent price of Rupees 487.95 per
cylinder ($869.94/mt) for April-November 2007, the minister said.
The government has forced refiners to hold their retail prices since the
start of this year, a period that has seen benchmark NYMEX light sweet crude
prices shoot up from around $61/barrel to nearly $100/b.
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I don't see demand slacking in either of those two growing economies as long as they can keep the price to consumers cappped. - DPR |
