China collects 20 bln yuan in special profit tax from oil producers

China has collected over 20 billion yuan (2.5 billion U.S. dollars) in special tax on the profits of its crude oil producers since March, said China's Vice Finance Minister Lou Jiwei.

Of the total sum collected, 12 billion yuan was allocated to farmers as subsidies and the rest went to other public interest sectors like forestry, for their oil consumption, said Lou.

The ministry decided to levy the charge on profits of domestic crude oil producers, starting on March 26, in a bid to readjust the huge profits of the monopoly industry.

Chinese oil producers now have to pay the central government 20 to 40 percent of their excessive profits when selling oil at a price above 40 U.S. dollars per barrel.

The proceeds will be used to subsidize disadvantaged communities and sectors of public interest.

Boosted by oil price hikes on the international market, China's oil producers saw their profits leap by 35.5 percent in the first nine months of this year.

Meanwhile, China's National Development and Reform Commission, which regulates domestic prices for processed oil according to changes on the world market, has kept prices relatively low, leading to losses for oil processors and waste by consumers.

From January to September, China's oil processing industry suffered a net loss of 43.4 billion yuan.

Source: Xinhua