It is clearly outlined in a package of resource tax reform plan submitted to the State Council that China will adjust up the coal resource tax rate from one percent to three percent, said an expert with the Environmental and Resource Committee of National People's Congress.

   Sun Youhai, director in charge of the committee's law division, stated that the reform plan still need solicit opinions of related departments.

   Considering the position and role of coal in the whole mineral resources, the 3 percent resource tax of coal will play a role of a barometer and resources tax of other mineral resources will be close to it, said Liu Heng, vice dean of the Taxation Affair School of the Central University of Finance and Economics.

   China's energy consumption reached 2.46 billion tons of standard coal in 2006, with coal consumption making up 69.4 percent of the total or 2.39 billion tons.

   Coal analysts forecast that due to high rise of oil price, coal supply will be tight next year and the price of ordinary coal will go up 12-15 percent and that of rare coal jump 20 percent.

   The upward adjustment of coal resource tax will be conducted to downstream products, which may further pressurize CPI growth.

   In addition, the further rise of coal price will increase pressures on adjustment of coal-fired electricity price. At present, the gap between electricity price and coal cost has been around 10 percent, and the implementation of new resource tax will further widen the gap.