Domestic fuel prices are hiked
China will raise the domestic price of gasoline and diesel as of Thursday. The move comes as international oil prices have been driven higher by recent unrest in the Middle East and rising demand as the global economy recovers from the financial crisis.
Cars line up at a gas station in Dalian, Northeast China's Liaoning province, to get their tanks filled before prices were adjusted Wednesday night. [Photo/Asianewsphoto]
On Tuesday, the international oil price rose to a two-and-a-half-year high, with Brent crude hitting $120 a barrel.Industry analysts said the move will put additional pressure on China's inflation battle and could impede the country's economic expansion.
The National Development and Reform Commission (NDRC), the country's top economic planner, said the domestic wholesale price of regular gasoline will rise by 500 yuan ($76) for each ton, or an extra 0.37 yuan per liter. Diesel prices will be lifted by 400 yuan a ton or 0.34 yuan for each liter. It's China's second fuel price rise this year and the fifth hike since the beginning of 2010.
On Wednesday, Cao Changqing, head of the price department at the NDRC, admitted at a news briefing that the price surge will add a "certain" pressure to domestic inflation, but noted that the major State-owned oil producers can no longer afford the increasing gap between domestic and international oil prices.
He also said the government will provide subsidies for the low-income groups such as farmers, bus companies and taxi drivers.
Under China's current pricing mechanism, the NDRC has the right to adjust the fuel price if a basket of crude prices rises by more than 4 percent in a period of 22 working days. Since China's last oil price adjustment on Feb 19, the price of Brent crude has risen by more than 15 percent.
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