BEIJING -- The reformation of China's resource tax will not impact China's domestic prices for oil and natural gas, the Ministry of Finance (MOF) and the State Administration of Taxation said Monday.

China's pricing mechanism for oil products is mainly based on the international oil price trend, which would not be influenced by the adjustment of the sales-based tax rates, the two departments said in a joint statement issued on the MOF website.

The domestic oil price is more likely to be influenced by global factors, including international speculation, the exchange rate of the US dollar, and supply and demand in the global market, the statement said.

The State Council, or China's cabinet, announced earlier this month that resource taxes on domestic sales of crude oil and natural gas will be extended from a few of the country's regions to the entire nation starting from Nov 1.

After the adjustments, sales-based tax rates for oil and natural gas will also be raised between 5 and 10 percent, up from the previous 5 percent implemented in northwest China's Xinjiang Uygur autonomous region on June 1, 2010.

The sales-based resource tax for oil and gas was extended to 11 other provinces in December last year.

The adjustment in resource taxes might bring down the profits of oil producers, but it will not affect the market price of oil products or further burden oil refiners and consumers, said the statement.

Earlier this month, the Chinese government reduced retail prices for gasoline and diesel by 300 yuan ($47) per ton for the first time in 16 months amid stubbornly high inflation.

The statement said the government will also keep the market price of domestic natural gas products stable at 1,115 yuan per cubic kilometers.

Web link: http://www.chinadaily.com.cn/bizchina/2011-10/25/content_13969382.htm

China's top energy official said on Oct 21 that the country will increase natural gas supply by 20 percent this winter to meet rising demand.

Liu Tienan, head of the National Energy Administration, said that natural gas supply would meet demand this winter even though demand was expected to rise.

Liu said that natural gas was playing an increasingly important role in the nation's energy consumption. Already 150 million people, or 11.2 percent of the Chinese population, have access to natural gas in their homes.

Data shows the country's natural gas output last year reached 94.48 billion cubic meters, rising 12.1 percent year-on-year.

However, Liu noted despite the increasing production, the country's supporting facilities such as storage capacities needed upgrading.

Web link: http://www.chinadaily.com.cn/bizchina/2011-10/22/content_13956015.htm

Bloomberg News

CHINA, with the world's busiest port at Shanghai, may double the number of local companies allowed to sell tax-exempt marine fuel as demand from ships increases.

The Ministry of Commerce is formulating the plan after it received applications this year from five companies looking to sell bonded bunker fuel, Zhou Yiqing, manager of the bunker department at Sinopec Fuel Oil Sales Co, which owns a unit licensed to sell such supplies, said in Beijing yesterday.

China's demand for bunker, or fuel used to power ships, is rising along with the nation's growing need for raw materials and rising export of finished goods. The world's fastest-growing major economy may need more than 20 million tons of bunker fuel a year by 2015, Zhou said.

The five companies that applied for licenses include state-owned China National Aviation Fuel Group Corp, the country's biggest jet-fuel distributor, China Arts Huahai Import and Export Corp and Shanghai Fuel Co, Zhou said. Officials at the three companies didn't immediately respond to telephone calls from Bloomberg News.

Five Chinese firms are now licensed to sell bonded bunker fuel, Zhou said. The companies include China Marine Bunker (PetroChina) Co, also known as Chimbusco, and a unit of China Petroleum and Chemical Corp in Zhoushan, Zhejiang Province.

Web link: http://www.shanghaidaily.com/nsp/Business/2011/10/21/Local%2Bcompanies%2Bselling%2