China exempts consumption tax for some fuel

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China's central government says oil used as an additive to produce ethylene, aromatics and other chemical products in China, will be exempt from consumption taxes for a whole year.

Domestically produced oil will be exempt from consumption taxes, and rebates will be offered to cover the consumption tax levied on "imported" oil for the same purpose. But some analysts said the decision won't provide much relief to independent refineries.

China introduced a consumption tax of 0.8 yuan on each liter of oil produced or imported, at the beginning of last year. Many independent refineries that thrived by processing this certain type of fuel additive, were largely hit by the move.