Lower fuel costs from tomorrow
By Richard Fu |
July 10, 2012, Tuesday
|
Print Edition
Print Edition
CHINESE motorists will be able to enjoy lower fuel prices tomorrow when the government cuts them.
The fuel prices will be lowered tomorrow because the decline in international crude oil rates has sparked a cut under the government's pricing mechanism, said Zhou Wangjun, a deputy director of the pricing department under the National Development and Reform Commission.
Zhou didn't reveal the size of tomorrow's price cut, which will be the third in as many months. The government last reduced fuel prices, by nearly 6 percent, on June 9.
The NDRC, China's top planning body, can adjust fuel prices when the moving average of a basket of global crudes changes more than 4 percent over 22 working days. The moving average fell 9.51 percent by last Friday, according to consultancy C1 Energy, so tomorrow's planned price cut has been widely expected.
When crude falls, the NDRC cuts fuel rates once the 4 percent trigger point is met. But when crude rises, it often delays a rise in fuel rates, CCTV quoted Zhou as saying.
The NDRC has been working to improve the frequency of fuel adjustments to make the current pricing system more transparent and predictable. But Zhou said it still needs "discussions" over when a new mechanism is ready.
"This cannot be done when crude oil prices are too high or when crude prices are below domestic crude production costs," he said. "We need to find a middle point."
The government usually announces fuel price changes on the eve of the day when new prices were effective. If there is a price rise, the short notice prevents speculation by fuel distributors who could use the time between the announcement and implementation to hoard fuel products.
The fuel prices will be lowered tomorrow because the decline in international crude oil rates has sparked a cut under the government's pricing mechanism, said Zhou Wangjun, a deputy director of the pricing department under the National Development and Reform Commission.
Zhou didn't reveal the size of tomorrow's price cut, which will be the third in as many months. The government last reduced fuel prices, by nearly 6 percent, on June 9.
The NDRC, China's top planning body, can adjust fuel prices when the moving average of a basket of global crudes changes more than 4 percent over 22 working days. The moving average fell 9.51 percent by last Friday, according to consultancy C1 Energy, so tomorrow's planned price cut has been widely expected.
When crude falls, the NDRC cuts fuel rates once the 4 percent trigger point is met. But when crude rises, it often delays a rise in fuel rates, CCTV quoted Zhou as saying.
The NDRC has been working to improve the frequency of fuel adjustments to make the current pricing system more transparent and predictable. But Zhou said it still needs "discussions" over when a new mechanism is ready.
"This cannot be done when crude oil prices are too high or when crude prices are below domestic crude production costs," he said. "We need to find a middle point."
The government usually announces fuel price changes on the eve of the day when new prices were effective. If there is a price rise, the short notice prevents speculation by fuel distributors who could use the time between the announcement and implementation to hoard fuel products.
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