Gasoline, diesel prices up by 4%
By Richard Fu |
December 22, 2010, Wednesday
|
Print Edition
Print Edition
THE retail price of gasoline and diesel rises by up to 4 percent today because of higher crude prices on the international market.
The rise is unexpected as it comes at a time when the Chinese government is fighting inflation.
The National Development and Reform Commission, the body which sets energy prices, raised gasoline by 310 yuan (US$47) a ton, or 0.23 yuan per liter, and diesel by 300 yuan a ton, or 0.26 yuan a liter, from midnight last night. Aviation kerosene prices increase by about 5 percent.
At Shanghai's pumps, the ceiling price for the widely used 93-octane gasoline is now 7.11 yuan, up from 6.87 yuan a liter; the price for 97-octane gasoline is now 7.57 yuan from 7.3 yuan; and that for zero-grade diesel is 7.03 yuan from 6.77 yuan.
Under a pricing mechanism introduced in the end of 2008, the NDRC is allowed to revise prices when a basket of international crude prices change more than 4 percent over 22 working days.
It also considers other factors, such as inflation and supply and demand, when reviewing prices.
Benchmark crude in New York has gained 8.6 percent since October 26, when China last raised fuel prices. China has increased prices three times this year and cut them once.
C1 Energy analyst Liao Kaishun said the change in crude prices was enough to trigger a rise in fuel rates, but the timing was unexpected by most market observers.
"Most market players expected the NDRC would postpone the price hikes until next month due to concerns about inflation," Liao said.
China's inflation accelerated to 5.1 percent last month, the fastest in 28 months, and the government expects inflation to remain high in the first quarter of next year.
The situation prompted the government to announce a range of measures to ensure adequate supplies of coal, oil and grain and other basic goods.
Price authorities in several provinces had also put a brake on plans to raise natural gas prices.
The NDRC defended its move yesterday, saying the increases had already been delayed and they were not as high as they could have been.
It said the impact of the latest rise on overall price levels would be limited and other state measures to contain inflation had been effective.
To avoid a "chain reaction" resulting from the rises, airlines are not allowed to raise fuel surcharges for domestic routes and railway operators and bus lines also cannot raise fares, the NDRC said.
"Though this will have some effect on downstream oil users in the short term, it will help maintain healthy and sustainable development of the national economy in the long term," the NDRC said.
The rise is unexpected as it comes at a time when the Chinese government is fighting inflation.
The National Development and Reform Commission, the body which sets energy prices, raised gasoline by 310 yuan (US$47) a ton, or 0.23 yuan per liter, and diesel by 300 yuan a ton, or 0.26 yuan a liter, from midnight last night. Aviation kerosene prices increase by about 5 percent.
At Shanghai's pumps, the ceiling price for the widely used 93-octane gasoline is now 7.11 yuan, up from 6.87 yuan a liter; the price for 97-octane gasoline is now 7.57 yuan from 7.3 yuan; and that for zero-grade diesel is 7.03 yuan from 6.77 yuan.
Under a pricing mechanism introduced in the end of 2008, the NDRC is allowed to revise prices when a basket of international crude prices change more than 4 percent over 22 working days.
It also considers other factors, such as inflation and supply and demand, when reviewing prices.
Benchmark crude in New York has gained 8.6 percent since October 26, when China last raised fuel prices. China has increased prices three times this year and cut them once.
C1 Energy analyst Liao Kaishun said the change in crude prices was enough to trigger a rise in fuel rates, but the timing was unexpected by most market observers.
"Most market players expected the NDRC would postpone the price hikes until next month due to concerns about inflation," Liao said.
China's inflation accelerated to 5.1 percent last month, the fastest in 28 months, and the government expects inflation to remain high in the first quarter of next year.
The situation prompted the government to announce a range of measures to ensure adequate supplies of coal, oil and grain and other basic goods.
Price authorities in several provinces had also put a brake on plans to raise natural gas prices.
The NDRC defended its move yesterday, saying the increases had already been delayed and they were not as high as they could have been.
It said the impact of the latest rise on overall price levels would be limited and other state measures to contain inflation had been effective.
To avoid a "chain reaction" resulting from the rises, airlines are not allowed to raise fuel surcharges for domestic routes and railway operators and bus lines also cannot raise fares, the NDRC said.
"Though this will have some effect on downstream oil users in the short term, it will help maintain healthy and sustainable development of the national economy in the long term," the NDRC said.
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