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Planning Commission on Raise of Refined Oil Prices
China Thursday announced a further increase in the prices of refined oil products, the fifth price hike in eight months.
According to a circular by the State Development Planning Commission with the approval of the State Council, beginning from July 14, the factory price for gasoline will be raised by 200 yuan per ton, and that of diesel by 180 yuan per ton.
The retail prices would be readjusted accordingly.
The five hikes since last November have raised the prices of gasoline and diesel by 42 percent and 37 percent, respectively. A commission spokesman said after all the hikes, the prices and pricing mechanism of China's crude oil and refined oil products is now finally in tune with the international market.
He denied that the price hikes are meant to compensate refineries' losses, saying they are more the result of market forces than the government's will.
Since April, 1999, the international crude oil price has risen by 100 percent, and the prices of gasoline and diesel by 62 and 84 percent, respectively.
On the other hand, China had become a net oil importer in 1993. By 1999, the country's crude oil import had exceeded 40 million tons, accounting for 20 percent of the crude oil processed in China.
Bringing the oil prices in line with international standards is also a move to prepare for China's accession to the World Trade Organization, which demands that China open its wholesale and retail markets for refined oil products, the spokesman said.
According to the spokesman, internationalized pricing would force China's refineries to improve their technology and management.
Despite the hikes, the spokesman said China's gasoline price is still much lower than the level in major industrialized countries such as the United States, France, the United Kingdom and Japan, where heavy taxes are imposed on gasoline consumption for environmental protection or restriction of consumption.
He conceded that the consecutive price hikes would have a big impact on major oil-burning industries and businesses, for which the government would take different cushioning measures.
Such measures, he said, including government allowances for farming, fishing and forestry sectors, raising railway and shipping prices, lowering administrative charges on taxies or raising prices for taxies and buses.
Finally, the spokesman warned against any unauthorized or disguised price hikes and assured that any such activities would result in severe punishment.
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