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QINGDAO TODAY
在线翻译:
szdaily -> Business -> 
Refiners want tax cuts before making cleaner shipping fuel
    2019-07-23  08:53    Shenzhen Daily

OIL refiners want changes to tax laws on the consumption and sale of fuel oil in order to start producing low-sulphur marine fuel when new global clean fuel rules start in 2020, four executives at Chinese oil companies said yesterday.

The Central Government should waive a 1,218 yuan (US$177.11) per ton consumption tax and offer rebates of the 13 percent value-added tax currently levied on fuel oil to allow the country’s refiners to economically produce the very low-sulphur fuel oil (VLSFO) needed to meet the rules, officials at China Chemical and Petroleum Corp., PetroChina and China National Offshore Oil Co. said.

The companies have lobbied the government for the tax changes to supply VLSFO for the so-called bonded marine fuel market. New rules from the International Maritime Organization will ban ships from using fuels with a sulfur content above 0.5 percent from 2020, compared with 3.5 percent now, unless they are equipped with exhaust scrubbers.

The head of Sinopec’s Jinling Petrochemical refinery asked the Central Government in March for the value-added tax rebates and the consumption tax waiver during the National People’s Congress meetings.

“Tax is a key hurdle to release domestic production and expand China’s bonded bunker fuel market,” said Harry Liu, executive director of downstream consulting with IHS Markit.

China Petroleum and Chemical, known as Sinopec, and PetroChina have announced they will together be capable of producing 14 million tons annually of VLSFO in 2020.

That would equal about 6 percent of the high-sulphur marine fuel oil consumed globally in 2018 and exceeds the current Chinese bunker market of 12 million tons annually.

But the officials said it would be uneconomic to produce the VLSFO without the tax changes.

(SD-Agencies)

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