Oil firms set to get tax rebates
By Richard Fu |
August 23, 2011, Tuesday
|
Print Edition
Print Edition
CHINA will grant tax rebates on natural gas imports in a bid to lighten the financial burden of the country's state-owned oil giants which have to sell the gas at a loss due to a gap between domestic and global prices.
The rebates will apply to imports of piped and liquefied natural gas during 2011 to 2020 as import costs are expected to be higher than domestic wholesale prices, according to a statement posted on the Ministry of Finance's website yesterday. But the ministry didn't give more details on the rebates.
Importers will receive the rebates quarterly, the ministry said.
The rebates will also be extended to imports of piped gas from central Asia in 2010, the ministry added.
The rebate move may help ease the financial costs of the state-owned oil giants, such as PetroChina, which are operating and building more LNG receiving terminals along the coast to meet rapidly growing demand for the cleaner-burning fuel.
China's LNG imports jumped 66 percent to 1.18 million tons in July from a year earlier, customs data showed yesterday. The LNG import costs averaged US$433 a ton last month, an annual rise of 47 percent. China also bought 907,545 tons of gas from Turkmenistan via the central Asia pipeline at US$423 a ton last month, according to the customs.
Energy prices are regulated in China by the government, which has to consider the affordability to the general public and inflationary concerns. Meanwhile, gas price reform has lagged changes in pricing of other fuel products, which generally follows global markets.
But rising imports of piped Turkmen gas and cargoes of LNG have reignited calls for a reform of gas pricing.
Zhou Mingchun, chief financial officer of PetroChina, said in March that the company lost 0.88 yuan (14 US cents) on the sale of every cubic meter of Turkmen gas in 2010, the first year of the cross-border pipeline's commercial operations. PetroChina received 4.3 billion cubic meters of Turkmen gas and sold 3.9 billion cubic meters last year, Zhou said.
The rebates will apply to imports of piped and liquefied natural gas during 2011 to 2020 as import costs are expected to be higher than domestic wholesale prices, according to a statement posted on the Ministry of Finance's website yesterday. But the ministry didn't give more details on the rebates.
Importers will receive the rebates quarterly, the ministry said.
The rebates will also be extended to imports of piped gas from central Asia in 2010, the ministry added.
The rebate move may help ease the financial costs of the state-owned oil giants, such as PetroChina, which are operating and building more LNG receiving terminals along the coast to meet rapidly growing demand for the cleaner-burning fuel.
China's LNG imports jumped 66 percent to 1.18 million tons in July from a year earlier, customs data showed yesterday. The LNG import costs averaged US$433 a ton last month, an annual rise of 47 percent. China also bought 907,545 tons of gas from Turkmenistan via the central Asia pipeline at US$423 a ton last month, according to the customs.
Energy prices are regulated in China by the government, which has to consider the affordability to the general public and inflationary concerns. Meanwhile, gas price reform has lagged changes in pricing of other fuel products, which generally follows global markets.
But rising imports of piped Turkmen gas and cargoes of LNG have reignited calls for a reform of gas pricing.
Zhou Mingchun, chief financial officer of PetroChina, said in March that the company lost 0.88 yuan (14 US cents) on the sale of every cubic meter of Turkmen gas in 2010, the first year of the cross-border pipeline's commercial operations. PetroChina received 4.3 billion cubic meters of Turkmen gas and sold 3.9 billion cubic meters last year, Zhou said.
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