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China: releases new detailed rules on "other fuel oil" consumption tax; imports may affected

https://www.chemnet.com   Jul 26,2010
The General Administration of Customs recently promulgated more detailed rules on consumption tax on imported "other gasoil and fuel oil" (HS code: 27101929).
According to the new rules, 1 kilogram of the product, which is the first statutory unit of measurement, is equal to 1.176 liter, the second statutory unit of measurement; water content should not be deducted when importers declare the weight.


GAC abolished at the same time the provision that importers should declare consumption tax of "other gasoil and fuel oil (HS code: 27101929)" by providing volume of the product at 25℃ under 101Kpa.


Based on the new rules, density of "other fuel oil" is 0.8503, consumption tax of which is Yuan 1,100.04/mt, about Yuan 150.7/mt higher than No. 5-7 fuel oil (HS code: 27101922), Yuan 40-60/mmt higher than the currently popular "other fuel oil" with density of 0.88-0.9. The 1,100.04/mt of consumption tax would increase Yuan 1-5/mt if taking into consideration water content, which is normally at 0.1-0.5%, C1 calculated.


Implementation of the new rules would impose more impacts on imports of "other fuel oil", although import volume marked year-on-year rise in the first half year on surge in Shandong, industry sources pointed out.


China's imports of "other fuel oil" added up to 1.75-mil mt in the first half of 2010, up 10% compared to a year earlier, showed GAC data. The imports for the whole year of 2009 recorded at 3.09-mil mt, sharply down 621,000mt or 17% from 3.71-mil mt in 2008, also indicated the data.


Shandong Province imported over 500,000mt of "other fuel oil in the first six months of this year, much higher than 150,000mt in the same period last year. "Import costs of such fuel oil especially the grade from Venezuela were obviously lower than straight-run fuel oil from other sources, so it was well received by Shandong independent refineries," said a Shandong-based importer. "Some low and medium sulfur straight-run fuel oil originating from Russia and Southeast Asia are usually categorized as 'other fuel oil'", added the importer.


Qingdao Yijia is major importer of "other fuel oil" with imports hitting 1.54-mil mt in 2008, occupying 41% of China's total in the year.
Bonded bunker traders Brightoil and Chimbusco would see their imports affected little by the newly-issued rules, because most of the imports would flow into bonded bunker market.


China imported 24-mil mt of fuel oil in 2009, of which 3.09-mil mt was "other fuel oil", according for 13%, according to GAC data.
The Chinese customs categorized fuel oil to two groups: No. 5-7 fuel oil and other fuel oil. Consumption tax of the former grade was Yuan 0.8/liter, and the volume of 1mt of the product was 1,015 liter.
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