China is set to begin another round of tax inspections on independent refiners that will last months, adding to pressure on refinery operations which are already running well below capacity, five trading and refinery executives told Reuters.
Independent refiners, mostly located in eastern refining hub of Shandong, account for roughly a fifth of total Chinese crude oil imports. The inspectors are expected to look into factors such as crude throughput levels and output of main taxable products such as diesel, gasoline and fuel oil, to gauge the amount of fuel tax due for each refinery and the crude oil import quota each plant is entitled to, the executive added.Neither the NDRC nor the national tax and audit authorities immediately responded to requests for comment.
“For most of this year many plants operated in the red... and now we are going to experience another round of stringent inspections,” said a second Shandong-based refinery executive.