China’s two big oil majors urge tax breaks for building gas storage and imports

A Sinopec worker walks past liquefied natural gas (LNG) storage tanks at an LNG terminal in Tianjin. (REUTERS)
Updated 08 March 2018
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China’s two big oil majors urge tax breaks for building gas storage and imports

BEIJING: Top officials from China’s two largest oil and gas producers have urged the government to offer tax breaks for the building of gas storage facilities and importing liquefied natural gas (LNG) to help avoid another gas crunch in the winter ahead.
Sinopec Vice President Ma Yongsheng said the central government should subsidize the construction of underground gas storage, LNG tanks and other facilities.
China National Petroleum Corp. (CNPC) President Wang Yilin urged the government to refund value added tax on LNG imports to lower gas costs for consumers.
Members of parliament and the Chinese People’s Political Consultative Conference, the Communist Party’s largely ceremonial advisory body, are encouraged to submit suggestions for future legislation during the current Parliament session.
Their chances of becoming legislation are minimal, but they can form part of future laws.
The proposals from Sinopec and CNPC come as the nation looks for ways to increase storage capacity for natural gas to avoid a repeat of this past winter’s heating crisis.
Millions of households in northern China switched from using coal to natural gas for heating before this winter, leading to rocketing gas consumption as well shortages across many regions.
The fuel shortages over the last three or four months deepened China’s worries over whether it can secure enough gas and LNG supplies in the winters ahead.
CNPC’s Wang said China’s gas demand will grow 15 percent to 16 percent in 2018 and supplies will continue to be tight, according to a transcript of his speech to a parliament meeting session published in CNPC’s official newspaper.
Sinopec’s Kong Fanqun, who heads the Shengli Oil field said a lack of storage facilities also contributed to China’s gas shortages this winter, according to a transcript of his speech sent to Reuters by the Sinopec Group.
The country needs an additional 50 billion cubic meters (bcm) of storage facilities by 2020 to meet its own demand, Kong said. That is five times the size of China’s current gas storage facilities.
Kong asked the government to give gas producers subsidies as well tax breaks to build and operate gas storage facilities.
Both Sinopec and CNPC officials also proposed removing resource taxes on the development of shale gas, coalbed methane, high sulfur gas and tight gas reserves.


France unveils major tax cuts as growth flags

Updated 24 September 2018
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France unveils major tax cuts as growth flags

  • Critics say most people have been left behind by President Emmanuel Macron’s policies so far
  • Patience is wearing thin for many as unemployment has barely budged since Macron’s election in May 2017

PARIS: The French government on Monday unveiled billions of euros in tax relief for businesses alongside further budget cuts, as President Emmanuel Macron struggles to deliver more jobs and higher growth as promised.
The former investment banker’s poll ratings have dived in recent weeks as growth has slowed despite a series of reforms presented as unavoidable shock treatment for getting France on solid financial footing.
Critics say most people have been left behind by Macron’s policies so far, which have seen him raise taxes on retirees while cutting a wealth tax on top earners.
Pensions and welfare benefits will be shaved further in the 2019 budget — Macron complained in June that France spends “a crazy amount of dough” on social programs.
And 4,100 more public sector jobs will be axed as Macron aims for a deficit of 2.8 percent of GDP, below the 3 percent limit set for EU members.
Higher taxes on fuel and cigarettes will also hit consumers next year.
But the government says the pillar of the 2019 budget will be a combined €20 billion ($23.5 billion) of tax cuts for businesses and six billion euros in tax relief for households, including a gradual end to an annual housing tax.
“The long-term goal is to build a new French prosperity that will benefit all French people in all regions,” Finance Minister Bruno Le Maire said as he presented the budget in Paris.
But he acknowledged that results from Macron’s reform drive so far “are unsatisfactory compared with our European neighbors, and we certainly don’t intend to stop here.”
“We’re doing less well than our European partners on unemployment, growth, the deficit and debt,” Le Maire said.
Patience is wearing thin for many as unemployment has barely budged since Macron’s election in May 2017, standing at 9.1 percent.
The 40-year-old centrist captured the presidency with a pledge to shake up an economy he says is held back by excessive regulations and rigid labor laws.
But growth has been slowing and is now widely expected to reach just 1.6 percent this year, and the government is forecasting an uptick to just 1.7 percent next year.
A poll released Sunday found just 29 percent satisfied with Macron’s leadership, while a separate survey last week said only 19 percent of French people held a positive view of his record.
He has promised to balance the budget in France for the first time in more than 40 years by the end of his term in 2022 — a task that will require an overhaul of state spending.
That has led him to take on France’s powerful labor unions to a degree not seen in decades, overcoming stiff resistance to new laws making it easier to fire people and ending the privileged status of rail workers.
He has also promised to cut 120,000 public sector jobs by the end of his term in 2022, a daunting prospect in a country known for its expansive bureaucracy which guarantees civil servants jobs for life.
Yet Macron has appeared to be dismissive of the concerns of everyday voters, most recently telling an unemployed gardener to go get a job in a restaurant or construction instead.
His reformist zeal has also exposed him to criticism that his policies favor businesses in particular, and he has struggled to shake off perceptions that he is “president of the rich.”
The vow to cut social spending is unlikely to reassure the lowest earners in France, where the number of people living below the poverty line has swelled to 14 percent of the population, according to national statistics office INSEE.