China plans to impose a new tax on coal, oil and gas extraction in western provinces, raising funds to develop its most restive region in a move that will reduce profits for PetroChina Co. and rival resource producers.

The country will change the tax to a price-based rather than volume-based levy, the government said in a statement on its website, citing comments by Premier Wen Jiabao at a meeting with officials yesterday. The shift will increase tax revenues that could be used to expand the local economy, analysts said.

“This is part of a wider trend to move some of the profits of companies with a near monopoly like PetroChina to poorer parts of the country so they can benefit,” Wang Aochao, head of China research at UOB-Kay Hian Ltd., said by telephone from Shanghai. “The government is worried about the divide between poorer regions in the west and the much richer east.”

President Hu Jintao has pledged to double investment in the western province of Xinjiang where social stability has been a priority since Urumqi, the capital, saw the country’s deadliest rioting in decades in July last year that left at least 197 people dead. China will embark on 23 projects in the west this year at a cost of 682.2 billion yuan ($100 billion), the National Development and Reform Commission said yesterday.

The projects include the construction of railways and roads, expanding airports, setting up wind farms, and building a nuclear plant in Guangxi province, the top economic planner said.

The world’s second-biggest energy consuming nation is planning to develop 13 solar power projects in six western provinces to help spur energy investment in the region, the NDRC said in a separate statement yesterday.

Xinjiang Tax

PetroChina fell 2.4 percent to HK$8.54 in Hong Kong trading today, while China Petroleum & Chemical Corp., known as Sinopec, dropped 2.8 percent. That compares with the 1.3 percent decline in the benchmark Hang Seng Index.

“The adjustment of the resources tax will undoubtedly lead to higher tax costs for energy producers led by PetroChina and Sinopec,” Grace Liu, an energy analyst with Guotai Junan Securities Co., said by phone from the southern city of Shenzhen.

China imposed a 5 percent price-based resources tax on crude oil and natural gas produced in Xinjiang, with effect from June 1, the Ministry of Finance said last month.

--Wang Ying in Beijing. With assistance from John Duce in Hong Kong and Winnie Zhu in Shanghai. Editors: Ryan Woo, Amit Prakash.