China to impose fuel tax 'very soon'

China will impose a long-awaited fuel tax "very soon", the head of National Development and Reform Commission's (NDRC) Energy Research Institute said in comments reported by the China Daily.

"The announcement will come very soon, and actually specific plans have already been suggested to the government long ago," Han Wenke, director general of the research body, was quoted as saying.

More than a decade in the works, the fuel tax - experts expect 25 per cent or more will be heaped upon retail pump prices - is meant to replace road tolls as a means to fund highway construction.

Beijing had held back on imposing the tax due to previous concerns about rising inflation, high and volatile oil prices, and a definitive fuel pricing scheme, officials had said.

China's state-regulated fuel prices were below international pump prices for years, but the slump in crude oil prices in the last few months has made China's retail prices comparatively high, giving the government a window of opportunity to cut prices and introduce a fuel tax without upsetting motorists. Crude oil has fallen below $55 a barrel this week, more than 60 per cent below the peak of $147 hit in July.

In a later online update of the news report, China Daily removed Mr Han's direct quote about an announcement being expected "very soon", instead only quoting him as saying that the dip in oil prices presented an opportunity to levy the tax.