China is likely to start levying a retail fuel tax from January, said a high-level official with the National Development and Reform Commission (NDRC).

The official also said the scheme prepared by the Commission has already been approved by the State Council.

"I personally think January is a good time to introduce the fuel tax," said Zhang Xiaoqiang, deputy director, NDRC, at a Sino-US Strategic Economic Dialogue meeting in Beijing.

Expectations are that the fuel tax and retail oil pricing reforms would form part of the same package. "If domestic oil prices are linked to global prices, then the government may stop the subsidies to big oil companies," he said.

A senior official with NDRC told China Daily on anonymity that the fuel tax reform scheme proposed by NDRC had finished seeking opinion from relevant interest groups.

"The reform scheme will be published in a few days to elicit public feedback," the unnamed NDRC official said.

Sources also told China Daily that the fuel tax reform will be an important issue that will be discussed at the Central Economic Work Conference next week.

(China Daily December 5, 2008)