Oil price in China surpasses US, reaches world medium level

17:21, March 29, 2011      

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As of now, the price of No. 98 gasoline has increased to 8.44 yuan per liter, which is higher than the current price of gasoline in the United States, and reached the medium level in the world, according to China Business News on March 28.

Recently, Sinopec issued the annual report for 2010, which revealed the turnover of Sinopec reached 1.9 trillion yuan, a 42 percent increase year on year, and 70.7 billion yuan belongs to the net profit of its parent company's stockholders, a 12.8 percent increase year-on-year; both the turnover and net profit set a new record in Sinopec's history.

According to the statistics from Sinopec, prices of gasoline and diesel fuel had increased by 14.6 percent and 17.7 percent, respectively, in the last year, and the situation indicates that prices of petroleum products have also jumped due to the increasing prices of crude oil.

China's oil price has exceeded US oil price

Mr. Hu, who lived in America for years, told reporters that gasoline in the country is divided into regular, mid-class and premium. Now, many Americans prefer regular gasoline for their vehicles due to the recent increase in prices.

America Online released a series of statistics showing gasoline prices in Bakersfield, California; Lihue, Hawaii and Cantwell, Alaska are the most expensive in United States, and they sit between 7.9 yuan and 8.3 yuan per liter.

Compared with the oil prices in above three cities, the price of No.98 gasoline in Shanghai, which is at 8.44 yuan per liter, is a little higher than that of the whole United States.

At the same time, Roanoke, Virginia; EL Dorado, Kansas and Castle Rock, Colorado have the cheapest gasoline in America, priced at 5.3 yuan to 6.4 yuan per liter. However, China's cheapest gasoline No. 90 can be found in Chongqing, Chengdu, Hunan and Jiangsu, and it is at 6.65 yuan to 6.8 yuan per liter.

The statistics from the website of Electronic Industries Association shows that oil prices in major cities of United States, such as New York, Boston, Chicago and Los Angeles., are mainly at between 6.03 yuan and 6.89 yuan per liter. While the prices of gasoline No. 93 in first-tier cities of China, including Beijing and Shanghai, are at about 7 to 7.45 yuan per liter.

Although the current oil price in China is a little bit higher than it is in the United States, Canada and other countries, a report published by China International Capital Corporation Limited (CICC) on March 28 points out that the China's oil price is still lower than prices in South Korea, France, Germany, Japan and so on, and among those countries, oil prices in France and Germany are about twice of the level of China's oil prices.

Reasons for differences in oil prices among different countries

Liu Bo, a researcher from Sinolink Securities, said the continuing low exchange rate of U.S. dollar means the American oil price is going lower and lower compared to China's oil prices.

In addition, China initiated the pricing system of petroleum products in 2009 and pulled China's oil prices back to normal market level gradually. According to the system, when the price of crude oil increases, China raises its prices for petroleum products accordingly.

However, China's oil prices are lower than some European and Asian countries mainly because of the differences in environmental protection policies and taxes.

Rui Dingkun, a researcher from China Jianyin Investment Securities, said the retail prices of gasoline in Germany, France, South Korea and Japan are about 300 U.S. dollars to 360 U.S. dollars per barrel, but 40 percent to 60 percent of it includes tax.

Reporters found out the oil prices in China and United States are basically equal to each other if no taxes were put on them.

By Wang Hanlu, People's Daily Online
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