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China Raises Oil Prices
China has decided to raise the prices of manufactured oil for the domestic market in a move to attune its oil pricing to the global market, it was learnt in Beijing on Monday.
The State Development Planning Commission allowed the producer prices of gasoline and diesel oil to rise by 300 yuan and 100 yuan per ton, respectively, in a directive released on June 1.
The China National Petroleum Corporation and China National Petrochemical Corporation can decide their own retail prices based on the government-set base, with the floating margin of five percent.
According to the directive, a new oil pricing formation mechanism under government regulation can better reflect the supply-demand relations, meet the needs of the growing national economy and ensure stable supply to domestic consumers.
China has become a net petroleum importer since 1993 and its oil imports are on the rise. Last year, imported petroleum accounted for 20 percent of the domestic market.
Echoing the price rise in the international petroleum market, China began to increase its oil price from last November. Observers noted that the latest upward adjustment is still lower than the price level on the world market, leaving room for further price rise.
However, to maintain order in the domestic market, the directive asked pricing departments at all levels to take consumers' financial conditions into full consideration. Local governments must keep an eye on the prices of oil products, the directive said.
Whoever raise the oil price at will or in any disguised form will be severely punished according to the Price Law, it added.
From now on, companies engaged in oil production and distribution should do their best to provide sufficient oil products and meet the demand of domestic consumers, it said.
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