Government postpones refined oil price increase

20:18, October 25, 2010      

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The government has decided to delay an increase in refined oil prices amid rising international crude rates after a surprise move by the central bank to raise interest rates last week.

"The National Development and Reform Commission should have increased domestic refined oil prices last week, " said Wang Yan, an industry analyst with the Beijing-based Anbound Information Technology. "But due to the recent interest rate hike, the top economic planner delayed the price adjustment for gasoline and diesel."

Last week, crude oil prices bounced back as the US dollar turned weaker. On the New York Mercantile Exchange, crude oil prices increased 1.40 percent to $81.69 a barrel last Friday. While on London's Intercontinental Exchange, Brent North Sea crude was up 1.38 percent to $82.96 a barrel.

A report out earlier this month by energy information provider Platts said that China's oil demand rose in September by 5.1 percent from the same period last year as inventories remained low, which served to further strengthen oil prices.

The company is a unit of McGraw- Hill.

China's end-September commercial crude oil inventory dropped by 3.4 percent month-on-month, while gasoline, diesel and kerosene stockpiles dropped by 3.9 percent at the end of September over the August figure.

Last Tuesday, The People's Bank of China, the country's central bank, unexpectedly increased interest rates by 25 basis points, a move aimed at curbing domestic property prices and rising inflation.

But many experts fear that the central bank move might slow economic growth and reduce commodity buying, which will in turn hurt a world economy where China serves as the engine of economic growth.

"The world economic recovery was fragile and uneven," it was announced at last week's G-20 meeting of finance ministers in the South Korean city of Gyeongju. "While growth has been strong in many emerging economics, the pace of activity remains modest in many advanced economies."

Source: Global Times


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