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Price of profligacy

(China Daily)
Updated: 2008-08-04 17:17

Should oil-guzzling motor vehicles and their smaller counterparts that consume much less oil pay the same rate of consumption tax while enjoying the same low level of oil prices subsidized by the government?

A notice released by the State Council by the weekend is the right answer to this question. It requires that the consumption tax rate for oil guzzlers be raised while that for cars consuming much less be lowered down. It says that the consumption tax will be imposed on cars in line with the amount of oil they consume - the more energy a car consumes, the higher rate of tax it will have to pay. The tax gap will be gradually increased between oil guzzlers and energy-efficient motor vehicles.

With soaring oil prices in the international market, the sale of SUV (sport utility vehicles) has been on the decrease in some developed countries; but it has been a totally different case in China. The import of SUVs from January to May increased by 50 percent over the same period of last year.

Apparently, this has something to do with the comparatively lower oil prices in China. Although the price has been raised by 500 yuan ($128) or 9 percent per ton since the middle of June, it is still low compared with oil prices in the international market.

It is understandable that the central government is cautious in raising oil prices for fear of a chain reaction in price hikes involving a wide range of products.

Yet, it is quite clear that the subsidies the government has given to oil production have been taken advantage of by those wealthy people who enjoy the low price oil for their SUVs. This has put the country in an embarrassment for subsidizing wealthy people for their irrational use of oil guzzlers, which not only waste energy, but also emit more exhaust into the air.

A policy has been long overdue to make users of oil guzzlers pay more not only for their choice of energy-intensive vehicles but also for their irresponsible action of causing more air pollution.

It is never too late to mend the fence even after the sheep is lost. The central government has made the right decision.

The tax SUV users pay should be high enough to let them feel the pain of choosing to lead a way of life against sustainable development. When they choose to show no regard to energy-saving and environmental protection, a higher charge is the only way to remind them of the impact of their action.