Gas, diesel hikes to hit the pump with oil prices set to rise

10:14, April 14, 2010      

Email | Print | Subscribe | Comments | Forum 

The National Development and Reform Commission, China's top economic planner, will lift retail ceiling prices of domestic refined oil for the first time in more than five months by 320 yuan ($46.88) per ton starting today.

That will translate into a price hike of 0.24 yuan ($0.04) per liter of gasoline and 0.27 yuan per liter of diesel. The highest retail prices after the regulation goes into effect will be 8,220 yuan ($1,204) per ton for gas, an increase of 4.05 percent, and 7,480 yuan ($1,096) per ton for diesel, a 4.47 percent hike.

The market has been expecting the hike since late March, as global crude oil prices have risen rapidly since last month.

"The NDRC might delay price regulation to shun potential inflation pressure, ensure fuel demand in the southwest for drought resistance and spring plowing," C1 Energy said in a note to the Global Times.

Figures from the company, a subsidiary of domestic commodity information provider CBI China, showed that as of Monday the moving average of crude prices set by the Brent, Dubai and Cinta benchmarks went up 6.77 percent against the price set last November.

The refined oil pricing mechanism China adopted last May allows the NDRC to adjust domestic fuel prices when global crude oil prices and a basket of international crude comprised of the Brent, Dubai and Cinta benchmarks report a fluctuation of more than 4 percent over 22 straight working days.

The formula prompted five price hikes and three cuts in 2009.

Platts, a provider of energy and metals information, said the mechanism encourages higher processing rates because it not only guarantees an estimated 5 percent margin for the refiners, but also factors in their crude processing costs.

However, the mechanism has been condemned for being overly simplistic since it was first put into effect.

Analysts said it was highly predictable and led to speculative stockpiling of fuel ahead of anticipated increases.

Some analysts said shortening the price adjustment term might be a way to make price changes unpredictable. Others disagreed.

Zhong Jian, chief economist with industry website oilgas.com.cn, said overly frequent adjustments might introduce abnormal fluctuations in the global oil market.


Source:Xinhua

(Editor:黄蓓蓓)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • On Sept. 26, a resident passes by a flower terrace decorated for the coming National Day. (Xinhua/Hang Xingwei)
  • The photo, taken on Sept. 26, shows the SWAT team ready for the joint exercise. (Xinhua/Wangkai)
  • Two metro trains in Shanghai collided Tuesday afternoon, and an identified number of passengers were injured in the accident, the Shanghai-based eastday.com reported. Equipment failures were believed to have caused the crash on the Line 10 subway, Xinhua quoted local subway operator as saying.
  • An employee at a gold store in Yiwu, located in east China's Zhejiang province, shows gold jewelry on Monday.(Xinhua/Zhang Jiancheng)
  • Tourists ride camels near China's largest desert lake Hongjiannao in Yulin, north China's Shaanx Province, Sept. 24, 2011. Hongjiannao is shrinking as a result of climate change and human activities, and may vanish in a few decades. Its lake area, which measured more than 6,700 hectares in 1996, has shrunk to 4,180 hectares. Its water level is declining by 20-30 centimeters annually and its water PH value has risen to 9.0-9.42 from 7.4-7.8. (Xinhua/Liu Yu)
  • Actors perform royal dance at the Gyeongbok Palace in Seoul, Sept. 27, 2011. A ceremony commemorating the 38th South Korea Sightseeing Day was held in Gyeongbok Palace on Tuesday. (Xinhua/He Lulu)
Hot Forum Discussion