The State Council said on Thursday it will seek public inputs on refined oil price reforms and the long-awaited fuel oil tax scheme.

The move is seen as a vital step to boost domestic demand as the government goes ahead with its steps to bolster economic sentiment.

The inputs will also lead to a fair taxation system and also enhance energy saving and environmental protection in the country, the State Council said.

Analysts said the move is a milestone in China's energy reforms. "The country should fully reform its energy sector to make it market-oriented," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

The tax on fuel oils will make people better understand the need for energy conservation, said Zhou Dadi, a researcher with the Energy Research Institute under the National Development and Reform Commission.

"As a country not very rich in energy resources, the enforcement of a tax on fuel oil will help China change previous energy consumption modes," said Zhou.

(China Daily November 27, 2008)