China to launch tax rebates on imports of natural gas

22 August 2011 10:43  [Source: ICIS news]

GUANGZHOU (ICIS)--China has decided to grant rebates in value added tax (VAT) levied on imported natural gas, where import costs are higher than its domestic selling price, the Ministry of Finance said on Monday.

The policy applies to both piped gas and liquefied natural gas (LNG) from 2011 to 2020, it said.

In addition, piped gas imported through the China-Central Asia pipeline before 31 December 2010 will receive retroactive rebates.

Under the plan, the payback rate would be calculated on a formula basis, using a three-month average of prices, according to a statement on the ministry’s website.

Currently, only PetroChina and the China National Offshore Oil Corp (CNOOC) import natural gas into the country.

Analysts said that the move is to offset cost pressures and encourage imports so as to satisfy the increasing demand for natural gas in the country.

China keeps its domestic prices of natural gas relatively low on concerns that inflation could unravel the economy.

China imported 1.3m tonnes of natural gas in the first half of 2011, an increase of 6.1% year on year, according to official data.

By: Fanny Zhang
+65 6780 4359

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