China should consider levying a tax on retail sales of gasoline and diesel as soon as possible, because it needed to focus on fuel efficiency and conservation in the longer term, said a Chinese government official Thursday.

"The fuel tax will not help contain the current high energy demand in China, but it will encourage conservation," said Zhou Dadi, director-general of the energy research institute under the National Development and Reform Commission (NDRC), China's top economic planning agency.

Domestic energy demand growth had outstripped the pace of the country's economic expansion since 2001, with the elasticity of energy demand exceeding 1.6 last year, said Zhou.

For more than 20 years, the elasticity of energy consumption was less than 0.5 on average, Zhou said.

In the short run, it would be difficult to rein in China��s high-energy demand growth, but the government needed to implement measures for the longer term, he said.

The Chinese Government hasn��t adjusted oil product prices for fear of stoking inflation, but analysts say a taxation policy such as a fuel tax will help slow the drain on the country's oil pool.

Earlier this month, Finance Minister Jin Renqing said the government was determined to levy a fuel tax.

China has been promising a national fuel tax since the 1990s.

Source: Shenzhen Daily-Agencies