China's State Administration of Taxation has issued a regulation to exempt naphtha used as feedstock to produce ethylene and aromatic hydrocarbons, from a consumption tax. Domestic producers and importers will be exempt from the CNY0.2 per liter tax from Jan. 1, 2008 to Dec. 31, 2010. However, naphtha used to produce other products, such as gasoline and diesel, will continue to be subject to the tax. The exemption will reduce the costs of producing ethylene and aromatic hydrocarbons, resulting in cost reduction of downstream products.
