CHINA should further raise the fuel tax to curb fast growing fuel consumption and traffic jams, an auto industry expert said yesterday.

But his call is controversial amid market concerns that higher fuel prices would further push up China's already surging inflation and heavily increase logistics cost that may hurt economic growth.

Rao Da, secretary-general of China Passenger Car Association, argued that raising the fuel tax would be vital to promote new-energy vehicles and encourage purchases of small-engine vehicles to reduce emission.

Rao said the extra tax income may boost agriculture and public transport subsidies.