China may extend VAT rebate for fuel imports

China may extend its value added tax (VAT) rebate program for gasoline and diesel imports till the end of the third quarter of 2008, as domestic refiners struggle with high international crude oil prices, domestic media said in June. Zhang Jianhua, vice president of China Petrochemical Corp. (Sinopec Group), said that the country might extend the value added tax rebate on fuel imports, instead of letting it expire at the end of June. In the March to June period, China’s two major oil companies, Sinopec Group and China National Petroleum Corp. (CNPC), received VAT rebates on 3.50 million tons of diesel and gasoline imports. “If the government does not continue its subsidy policy, the two may cut back production to stem losses, which will add to the heavy pressure on domestic fuel supplies and have a negative impact on society,” Zhang said. China imported 17.34 million tons of oil products in the first five months of 2008, up 17.3% year-on-year. (June 17, 2008)