In the U.S. we (Economists) often don't recognize some of the other alternatives that may exist - or maybe these other alternatives don't seem so apparent to "small government" countries?!?  (YES, the U.S.A. is definitely a small "government country" - even WITHOUT a flat tax, Scott! - but then that doesn't mean pushing for an even smaller government isn't without merit!!!)  Perhaps that is why refunding the value-added taxes on imported gasoline and diesel didn't even enter my thought process.  That is, as a solution to the price ceiling on gasoline and diesel.  Then again, with the price of oil expected to stay above $100 per barrel for the year at least, I was looking to longer term solutions than June 30th.

So from the China Daily of April 16th, 2008:

Value-added taxes on 500,000 tons of gasoline and 1 million tons of diesel imported by China National Petroleum Corporation (CNPC) between April 1 and June 30 this year will be refunded, the ministry said on its website yesterday.

It will also return collected taxes to China Petrochemical Corporation (Sinopec) on imports of 500,000 tons of gasoline and 1.5 million tons of diesel in the same period, the statement said.

Analysts said the 17 percent tax refund is aimed at reducing the refining losses of the oil companies and increasing refined oil products supply in the domestic market to prevent a shortage.

"The tax rebate will reduce the refining losses of CNPC and Sinopec to some extent," said Zheng Zhiguo, an energy analyst with Shenyin Wanguo Securities in Shanghai. "But the amount is small and cannot fully cover the losses."

Hmmm, I guess we will continue to follow this topic into the next school year as well!!