China has extended its resource tax on domestic sales of crude oil and natural gas to 12 western regions and provinces, a government official said on Friday.

China started levying a 5-percent resource tax on crude and natural gas sales in the northwestern Xinjiang region from June 1 before spreading to other resources-rich provinces.

It was last introduced in the northern Inner Mongolia region from Dec. 1, the official told Reuters, without naming the specific regions.

The tax, which is based on prices instead of the previous quantity-based mechanism, is expected to boost local government revenues but will cut into earnings of oil and gas firms such as PetroChina and Sinopec Corp.

"The old resource tax, introduced since 1994, was very low. The crude and natural gas prices have soared since then, so we adjusted it to be based on sales," said the official.

Previously, the resource tax on crude was around 30 yuan ($4.50) per tonne, the official added.

The official added that for thick oil, high condensation oil and high sulphur natural gas, the levy is lowered by 40 percent, or at about 3 percent.

Analysts, however, have said the impact on oil and gas firms' revenues may be mitigated by an increase in natural gas prices and possibly changes on windfall taxes on oil productions.

Premier Wen Jiabao said earlier this year that the government was on the verge of expanding the resource tax trial throughout China's western region and that it would also cover coal production.  ($1=6.663 Yuan)