China last week raised the tax on gasoline, naphtha, solvent oil and lubricating oil for the third time since the end of November. The tax was increased from about 23 cents a litre to 25 cents to raise money for programs to counter pollution and to encourage development of renewable or non-polluting energy sources. However, at the same time, the retail price of gasoline was cut by the equivalent of $29 a tonne and diesel by $37 a tonne to reflect the drop in the international price of crude oil. The result is that Chinese automotive manufacturers and sales outlets are anticipating a sharp drop in demand for hybrid and electric cars this year.
