Rao Da said: After the implementation of the fuel tax rate will gradually adjust to place
At the "6th China Automobile Industry Development Summit Annual Conference & 2008 China Automobile & Parts Market Analysis & Forecasting Conference," hosted by the China Machinery Industry Federation and the Liaoning Provincial Development and Reform Commission, Chang Rao Da, Secretary of the National Passenger Car Market Information Association, emphasized the need to reevaluate the fuel tax from both an automotive and societal transformation perspective. He stressed that understanding the rationale behind the fuel tax is crucial for its successful implementation.
Rao Da pointed out that the fuel tax was introduced during a time when automobiles were becoming more integrated into society, but it still plays a vital role in shaping the future of transportation. He explained that once the fuel tax rate reaches a certain threshold relative to gasoline prices, it can significantly promote energy conservation. This would help slow the growth of oil imports and enhance national economic security. Additionally, a well-structured fuel tax could encourage a shift toward alternative energy sources, supporting the development of a more sustainable, resource-efficient society.
He also mentioned that the best time to implement the fuel tax was between 2002 and 2003, and the most feasible period now might be early 2008. However, he noted that the timing isn't just about opportunity—it's about the government's commitment. The real challenge lies in political will rather than technical feasibility.
Despite this, Rao Da acknowledged that implementing the fuel tax is not without complications. Many existing fees are deeply embedded in the system, making it difficult to eliminate a large number of them at once. As a result, some media reports suggesting a reduction in four to six types of fees are unlikely. The most probable change is the reduction of road maintenance fees. He also warned against exaggerated claims, such as increasing fuel prices by one or two cents after deducting tolls, which could undermine the broader strategic goals of the fuel tax.
According to Rao Da, the first step in implementing the fuel tax would involve setting it at 30% to 40% of the gasoline price—a relatively low level globally. However, this rate would gradually increase over time. Such a phased approach would allow for the reduction of other vehicle-related charges, boost government funding for automotive reforms, minimize disruption to the auto industry, and encourage greater fuel efficiency. In the long run, China’s fuel tax could approach levels seen in Japan and Hong Kong, where it accounts for around 200% of oil prices—though this transition would likely take at least a decade.
He concluded that while the initial impact of the fuel tax on small-displacement vehicles and hybrid cars may be limited, its influence will grow as the tax increases. Over time, it could play a key role in reshaping consumer behavior and promoting a more sustainable transport ecosystem.
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