China plans to impose consumption taxes on oil by-products such as mixed aromatics, light cycle oil and bitumen blend, tightening regulations on a fuel import market worth millions of dollars. The proposed taxes of more than RMB1,000-2,000 yuan (USD 145-290) per ton for the oil products could start in July. The taxes will effectively close a loophole often used by oil traders in China and will shut the door on nearly 20 million tons of imports of these products and improve sales of fuel produced locally. Outside of China, the policy change will have a ripple effect across trading companies and refineries in Asia and Europe which have relied on the world's second-largest oil consumer as a key outlet for such products. Importers of mixed aromatics, petrochemical products such as benzene, toluene and mixed xylenes that are blended with gasoline to boost octane levels, may have to pay RMB 2,000 yuan per ton as a consumption tax, similar to that levied for gasoline. China is inching closer to imposing a consumption tax on mixed aromatics, light cycle oil (LCO) and bitumen blend. The plan has shaken up everyone from the oil industry to the shipping industry. Mixed aromatics is the main blending material for gasoline, and LCO for gasoil. Bitumen blend is a mixture of fuel oil and heavy crude, which can be used as a refining feedstock. The planned policy change will likely curb inflows of those products and stem surging oil product exports by Asia's biggest oil consumer. Details are expected to be released sometime after July 1. China's imports of mixed aromatics and LCO have surged in recent years, as both are currently free of consumption tax. China's mixed aromatics imports jumped 81.4 % YoY to 11.7 million ton in 2016, while LCO imports soared 135 % to 4.46 million tons. The mixed aromatics inflows in 2016 translated roughly into 39 million tons of gasoline supply from the blending pool, in addition to the official output of 130 mta from refineries. LCO inflows resulted in an additional 10 million tons of gasoil supply on top of the 180 mta output from refineries.