China’s central government energy regulator decided to raise gasoline and diesel benchmark retail prices by 400 yuan (US$58) per ton as of Monday.
The National Development and Reform Commission, the regulator, ruled that the benchmark retail price for gasoline would increase by 7 percent and the price of diesel by 8 percent, said a statement on the NDRC website.
The latest hike is the third oil price adjustment this year. On March 25, NDRC lifted benchmark retail price of gasoline by 290 yuan per ton and diesel by 180 yuan per ton.
The increase was in response to the rising international crude prices under the country's the new fuel pricing mechanism, which took effect January 1, 2009.
Under the new mechanism, China's domestic prices are to be "indirectly linked" to global crude prices "in a controlled manner." China would adjust domestic fuel prices when global crude prices reported a daily fluctuation band of more than 4 percent for 22 working days in a row.
NDRC pricing department official Xu Kuning has explained the "indirect link" as "based upon average global crude prices, while taking into account domestic production costs, taxation, and 'appropriate profits' for oil producers."
Crude prices have jumped 30 percent in May, the largest monthly rise since March 1999, boosted by expectations of a global economic recovery later this year.
Light, sweet crude for July delivery rose $1.23, or 1.9 percent, to settle at $66.31 a barrel Friday on the New York Mercantile Exchange.
In Sunday's notice, the NDRC urged the two state-owned oil producers, PetroChina and Sinopec,to increase oil production to meet demand. It also urged local pricing regulators to strengthen supervision over oil prices and crack down on any price violations.
People's Daily Online/Xinhua