Ministry of Transport: Once the fuel tax is set, the price of oil will rise three times
2021-04-29 15:02:00
On the highway seminar jointly held by the Ministry of Communications and the World Bank on May 27th, the World Bank released the latest research report “China’s Highway: Connecting the Public and the Market to Achieve Fair Development†(hereinafter referred to as the “Reportâ€), recommending that China The fuel tax should be levied as soon as possible to make up for the road financing gap, and pointed out that if the post-tax oil price is increased to three times the oil price in mid-2006, the income tax revenue can be sufficient to cover all highway maintenance and road construction costs in China.
The "Report" pointed out that the construction cost of China's highway network will be as high as 225 billion U.S. dollars. The construction and financing needs in the next 15 years will be huge. It also shows that if the Chinese government decides to rely solely on fuel tax to support various highway maintenance expenditures, the after-tax price of fuel will be 30% higher than the oil price in mid-2006. Correspondingly, if the post-tax oil price is increased to three times the oil price in mid-2006, the income tax revenue can be sufficient to cover all the costs of maintenance and planned road construction.
According to the reporter's calculation on June 30, 2006, the price of gasoline in Beijing No. 93 was calculated to be 5.09 yuan per liter. After the tax was changed, all road maintenance and construction costs in China would come from taxes. Then, the maximum price of oil would reach 15.27 yuan per liter.
Shi Baolin, vice president of the Research Institute of the Ministry of Communications, also told reporters that most of the national road maintenance and construction costs still come from bank loans, accounting for more than 50%, and the other larger source is the capital provided by the government. About 35%, and the rest come from vehicle purchase surcharges and road maintenance fees. "As a result of the public welfare nature of the highway, the capital provided by the government should be further increased." Shi Baolin said, "The ratio of 50% to 60% is the most ideal. This will not only improve product competitiveness, but also reduce tolls. â€
At the same time, the "Report" pointed out that the fuel tax should be levied on the basis of road network development and upgrading needs, implementation should be gradually promoted, and farmers and rural areas should be provided with free tax or tax rebate to reduce its impact. International experience shows that the economy itself will adjust the high fuel prices, especially when new taxes are imposed while other taxes are reduced.
The "Report" pointed out that the construction cost of China's highway network will be as high as 225 billion U.S. dollars. The construction and financing needs in the next 15 years will be huge. It also shows that if the Chinese government decides to rely solely on fuel tax to support various highway maintenance expenditures, the after-tax price of fuel will be 30% higher than the oil price in mid-2006. Correspondingly, if the post-tax oil price is increased to three times the oil price in mid-2006, the income tax revenue can be sufficient to cover all the costs of maintenance and planned road construction.
According to the reporter's calculation on June 30, 2006, the price of gasoline in Beijing No. 93 was calculated to be 5.09 yuan per liter. After the tax was changed, all road maintenance and construction costs in China would come from taxes. Then, the maximum price of oil would reach 15.27 yuan per liter.
Shi Baolin, vice president of the Research Institute of the Ministry of Communications, also told reporters that most of the national road maintenance and construction costs still come from bank loans, accounting for more than 50%, and the other larger source is the capital provided by the government. About 35%, and the rest come from vehicle purchase surcharges and road maintenance fees. "As a result of the public welfare nature of the highway, the capital provided by the government should be further increased." Shi Baolin said, "The ratio of 50% to 60% is the most ideal. This will not only improve product competitiveness, but also reduce tolls. â€
At the same time, the "Report" pointed out that the fuel tax should be levied on the basis of road network development and upgrading needs, implementation should be gradually promoted, and farmers and rural areas should be provided with free tax or tax rebate to reduce its impact. International experience shows that the economy itself will adjust the high fuel prices, especially when new taxes are imposed while other taxes are reduced.
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