China has raised the price of gasoline, diesel and aviation fuel by about 10
per cent, or 500 yuan (US$62.4) per tonne, as of today, sources with the State
Development and Reform Commission said.
An official with the commission
said last night it had decided to increase fuel prices as China's current prices
are far below those of the international market, which has damaged Chinese oil
refineries' profits.
He added that the soaring price of crude oil on the
international market had been above US$70 per barrel for days.
The
commission has asked all local governments to strictly implement a series of
subsidy policies after the fuel price rise and take measures to protect taxi
drivers' incomes.
It also asked the two national oil suppliers
China National Petroleum Corporation (CNPC) and China Petroleum and Chemical
Corporation (Sinopec) to increase the supply of processed oil to meet
market demands.
This is "the largest adjustment since 2003," according to
an Interfax report.
The last oil price adjustment came on March 26, when
gasoline and diesel retail prices rose by 250 yuan (US$31.25) and 150 yuan
(US$18.75) per tonne.
Compensation measures were issued for transport and
agricultural industries on March 26, and were believed to pave the way for
further oil price hikes.
After the latest rise domestic fuel prices will
still be around 800 yuan (US$100) per tonne less than on the international
market, according to Gordon Kwan, director of China Oil and Gas Research with
Hong Kong-based CLSA brokerage.
Since January 2003, China's benchmark
90-octane retail gasoline guide price has risen by 56 per cent and its diesel
fuel price has risen by 50 per cent.
In the same period international
crude oil prices have doubled.
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