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China ponders oil pricing reforms
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Government agencies this week discussed ways to change the prices of oil products including lowering prices at the pump and restructuring fuel taxes and fees.

Government agencies this week discussed ways to change the prices of oil products including lowering prices at the pump and restructuring fuel taxes and fees. 



The price drop is a welcome relief, and government officials say now is the time for oil pricing mechanisms to be reformed after a decade of delays.

One possible idea is introducing a fuel tax to replace road tolls.

Zhou Dadi, Researcher of National Dev't & Reform Commission said "The fuel tax levy is not just about replacing fees with taxes. More importantly, it would make price signals more reasonable. Since oil prices have fallen dramatically recently, implementing a fuel tax now would have less impact on the price at the pump. It is a good opportunity to bring in a fuel tax."

Fuel taxes in other countries vary considerably. The fuel tax in the United States is 30 percent, while it's 120 percent in Japan and 260 percent in Germany. Market analysts predict China will set its fuel tax at between 30 and 50 percent.

(CCTV November 25, 2008)

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