China has been studying a fuel tax reform to replace the current road tolls imposed upon motor drivers, the country's top economic planning body announced Thursday.

The National Development and Reform Commission said on its website that a meeting was held recently in Beijing with the Finance Ministry, the Transport Ministry and local governments. Topics discussed at the meeting include reforms on the country’s oil products price mechanism, lowering pump prices, the reform of fuel taxes and fees and the cancellation of road tolls.

Earlier reports said China was ready to reform its oil pricing mechanism in 20 days, which covers mainly the current price regulation on refined petroleum products.

A source quoted by China Daily revealed the new pricing measures are already laid out to replace the old ones nationwide. The aim is to complete China's fuel tax reform and to encourage energy conservation and emission control.

Currently, China's crude oil prices are determined by the global market forces but its prices for refined oil products have remained under government regulation.

The introduction of a fuel tax in China was first proposed in 1994 but has been delayed amid concerns that it would impose too great a burden on those who consumed more oil, according to a report by the Xinhua news agency on Thursday.

The government has instead collected road maintenance fees from automobile users regardless of how much gasoline or diesel oil they use, the report said.

Analysts said the on-going oil price drop presented a good opportunity for China to resume its fuel tax reform.

World crude oil prices fell to the current $53.62, down more than 60 percent from the peak price of $147 in mid-July.

(CRIENGLISH.com November 20, 2008)