Sinochem's Shandong-based refiners told to rectify fuel tax practice
China's Shandong province has ordered its refineries, including three plants under state-run Sinochem Holdings, to self-inspect and self-rectify any irregular fuel tax practices, a document reviewed by Reuters on Thursday showed.
The move is part of a national clamp-down on smaller and mostly independently run refineries related to crude oil import quota usage and tax payments, as Beijing works to consolidate its bloated industry.
The plants were asked to complete a self-check and come up with rectification plans within five days from Nov. 15, the document, issued by the provincial government of Shandong, said.
The provincial government of Shandong, which is home to some 60 independent refineries, did not immediately respond to a request seeking comment.
Sinochem did not immediately respond to an email request for comment.
Shandong authorities did not elaborate in the document on how many refineries are included in this round of inspections, but stated that plants should reveal all relevant irregular tax issues dating back to January 2019.
"In the case of failing to submit factual reports on time, the highest degree of punishment will be applied and relevant individuals will be held responsible according to relevant laws," the document said.
A special audit team has been dispatched to three Sinochem plants, according to the document, without naming the plants or giving any details of their tax situation.
Two industry sources suggested that Changyi refinery, Huaxing refinery and Zhenghe refinery, with a combined annual primary crude oil processing capacity of 20 MM tons (400,000 bpd), might be among those under scrutiny.
The three plants are under China National Chemical Company, or ChemChina, which was merged earlier this year with state-run Sinochem Group to form a new entity called Sinochem Holdings.
The retroactive tax inspection that effectively covers nearly three years of tax payments follows a similar probe by the national government into companies in the northeast city of Panjin, the document added, without elaborating.
Reuters reported last month that Unipec, the trading arm of Asia's largest refiner Sinopec, has stepped in to supply crude oil to two independent refiners in Panjin facing an official tax probe, to help the plants maintain operations.
Comments