China has imposed a windfall profit tax on domestic crude oil sales with immediate effect, the government's top economic planning body said, without revealing how big the tax would be or how it would be applied.
Talk has circulated for months of a windfall tax on producers - whose profits have soared as oil prices rose - to help alleviate the losses that refiners face in selling products on the regulated domestic market. The statement, seen on Monday, was the first confirmation from Beijing that it would go ahead.
"According to the rule by the state council, China will start collecting from oil producers a windfall profit tax for sales of domestic crude oil with effect from the same date as the price increase," the National Development and Reform Commission said in a statement on its Web site (www.ndrc.gov.cn) on Sunday. It said further details would be announced separately by the Ministry of Finance.
Analysts said producers' bottom lines would be hurt, but it was too early to gauge the precise impact of the policy move without further detail.
China's refining sector lost about 24 billion yuan ($3 billion) in the first 11 months of last year, while oil producers made 69 billion yuan ($8.5 billion), government data showed.