China will stop tax rebates for exports of gasoline and naphtha and restrain crude oil processing trade for the rest of the year to ensure domestic demand is met.

The country will scrap the preferential tax policy for exporters of motor and aviation gasoline and naphtha from September 1 to December 31, the State Administration of Taxation said in a statement published on its website Tuesday.

Gasoline exporters in China now enjoy a 11-percent tax rebate and the tax deduction for exports of naphtha, a raw material for the production of ethylene, stands at 13 percent.

Sources with the National Development and Reform Commission said that besides suspension of tax rebates for gasoline, China will no longer approve new contracts on crude oil processing trade.

Statistics from China's customs showed that China exported 3.34 million tons of gasoline in the first half of this year, up 31.6 percent, but refined-oil imports dropped 20.9 percent for the six-month period.

Meanwhile, the country exported some 1.2 million tons of naphtha in the period, a rise of more than 200 percent year on year.

Source: Xinhua