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China raises fuel prices

0 Comment(s)Print E-mail China.org.cn, February 25, 2013
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China has raised fuel prices by more than 3 percent in response to higher global crude oil rates. Gasoline went up by 300 yuan per ton while diesel added 290 yuan per ton starting from Monday, the country's top economic planner said Sunday.


The benchmark retail price of gasoline will be lifted by 0.22 yuan per liter and diesel by 0.25 yuan per liter, the National Development and Reform Commission (NDRC) announced, making it the first oil price adjustment in 2013.

Under China's oil product pricing system introduced in 2009, domestic fuel prices may be adjusted when crude oil prices in Brent, Dubai and Cinta change by more than 4 percent over 22 working days.

The commission said it adjusted gas prices in accordance with the oil pricing system as oil prices in the three places have met the requirements.

However, experts warned that the price hike may finally translate into consumer prices and build up inflation pressure on China.

Lin Boqiang, an energy expert at Xiamen University, said although raising gas prices may not directly affect the overall price level over the short term, the pass-through effect it exerts on the downstream of the supply chain will push up consumer prices in the end.

Rise in gas prices will add to costs of transportation, fishery and agricultural production, and finally pass on to consumers, said Zhang Yonghao, an analyst with chem365.net, an energy consulting website.

But Lin also said China's gas prices remain in the medium level, compared with neighbors and other large oil importers.

The gasoline prices in Japan, the Republic of Korea, Britain and France all exceeded 10 yuan per liter in January, at least 2 yuan higher than in China, according to NDRC figures.

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