From today the price of gasoline, diesel and aviation fuel in
China goes up by about 10 percent, or 500 yuan (US$62.4) per ton,
according to the State Development and Reform Commission.
An official with the commission said last night the decision to
increase fuel costs related to the fact that China's current prices
are far below those of the international market and this was having
an adverse impact on the country's oil refineries.
He added that the soaring price of crude oil on the
international market, which has been above US$70 per barrel for
days, had contributed to the decision.
The commission has asked all local governments to strictly
implement a series of subsidy policies after the rise and take
measures to protect the incomes of taxi drivers.
It also asked the two national oil suppliers China National
Petroleum Corporation and China Petroleum and Chemical Corporation
to increase the supply of processed oil to meet market demands.
This is "the largest adjustment since 2003" according to an
Interfax report.
The last oil price adjustment came on March 26 when gasoline and
diesel retail prices rose respectively by 250 yuan (US$31.25) and
150 yuan (US$18.75) per ton.
Compensation measures were put in place for transport and
agricultural businesses on March 26 and were believed to pave the
way for further oil price rises.
Following this latest rise domestic fuel prices will remain
around 800 yuan (US$100) per ton less than on the international
market, according to Gordon Kwan, director of China Oil and Gas
Research with Hong Kong-based CLSA brokerage.
Since January 2003, China's benchmark 90-octane retail gasoline
guide price has risen by 56 percent and its diesel fuel price gone
up by 50 percent.
(China Daily May 24, 2006)