Pricing pegging squeezes oil industry

The price for refined oil products in China is set by the government rather than oil companies themselves. As many know, this is meant to keep the country's oil giants from leveraging their dominant position in the market to gouge consumers.

Domestic refiners, which are heavily reliant on oil imports, have no way to increase their prices when international oil prices rise. In other words, if a refiner in China buys high, government regulations mean that it may still have to sell low.

Yet, this has not stopped consumers in the downstream from complaining about domestic fuel prices. Many believe that gasoline and diesel are too expensive as it is, but if they make their views known to the country's oil giants, there is nothing they can do about.

Rather than merely dictating market prices of refined oil, the government should monitor how much enterprises are charging as regulators generally lag behind when it comes to price efficiency.

We recommend:
A Decade of Fastest Development	Eastern Boom Lightens Western Gloom	Chinese firms 'potential Trojan horses'? slows
AVIC unveils new aircraft engines	Oct. data released, inflation slows	13th Int'l Automobile Industry Exhibition
China Int'l Industry Fair opens in Shanghai	Caofeidian coal wharf put into use	Galaxy Soho building in Beijing