Oil firms will have to pay a windfall tax of 20-40% for every barrel of crude oil they sell above the US$40 mark, the South China Morning Post reported. A 20% tax is to be imposed on prices ranging between US$40 and US$50, with the levy rising five percentage points for every US$5 price increase up to US$60 a barrel. China Petroleum and Chemical Corp (Sinopec) chairman Chen Tonghai said the government hadn't given specific times for the taxes to be introduced but it would take place step-by-step so as not to fuel inflation. There will also be a change in the method used to calculate refined oil prices with the average crude oil cost to be added to insurance and freight costs as well as an undisclosed profit margin. Sinopec, which focuses on downstream refining, can expect to offset the new tax thanks to the introduction of higher petrol and diesel prices last month.