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Fuel price seen stable and no rise at weekend

CHINA'S fuel price will remain at the current level and will not be increased at the weekend, said an official from the National Development and Reform Commission.

The official, who declined to be named, said the country would not raise prices for gasoline and diesel during the three-day Dragon Boat Festival holiday, which started on Thursday.

But he said it is "hard to say" whether the price would be increased in June.

He made the remark in response to a rising expectation that China would raise the fuel price on Thursday as the crude oil price rebounded strongly in the past few months on global markets.

The price of crude topped US$63 per barrel on the New York Mercantile Exchange on Thursday. Light, sweet crude for July delivery rose US$1 a barrel to settle at US$63.45.

Some analysts had predicted that a possible increase in fuel price might be unveiled on Thursday, citing the country's new oil pricing mechanism, which was unveiled in early May.

The new pricing mechanism rules that domestic fuel prices would be adjusted when global crude prices report a daily fluctuation of more than 4 percent for 22 working days in a row.

Zhong Jian, a chief analyst with the Website, said although the global price rise has enabled the central government to increase domestic fuel price, it may delay the time line taking into consideration major fuel consumers such as transport and agricultural industries.

Dong Xiucheng, a professor at China University of Petroleum, echoed Zhong, saying the central government just plays the role of a rule maker, instead of a pricing maker. The crude price is calculated base on various factors, according to Dong.


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