The National Development & Reform Commission, China's energy watchdog, announced on Dec 21 to raise retail ceiling prices Yuan 310/mt for gasoline and Yuan 300/mt for gasoil effective from Dec 22. Ex-refinery price of jet kerosene is lifted Yuan 300/mt to Yuan 5,990/mt at the same time.
Benchmark retail price of gasoline rose Yuan 0.23/liter and gasoil up Yuan 0.26/liter, C1 calculated. After the hike, the average retail price of 90-Ron gasoline is Yuan 8,530/mt and price of zero pour point gasoil reaches Yuan 7,780/mt, up 3.77 percent and 4.01 percent, respectively. C1 believed the price hike was a "modest one", as the hike was less than half of what the international crude oil has gained in the past month.
Hike delayed, yet unexpected
The price hike is a long-delayed, however, also an unexpected move as China is facing tremendous rising inflation pressure, with the country' s consumer price index (CPI) accelerated to a 28-month high in November of 5.1 percent.
As of Dec 20, the 22-working-day moving average price of Brent, Dubai and Cinta crude climbed 9.16%, C1 s data indicated.
The Chinese government adopted an oil pricing mechanism at the start of 2009 that allows the NDRC to adjust retail oil products prices when the weighted average price of the three international crudes change more than 4 percent over 22 straight working days.
Well considered by NDRC
The decision to increase gasoline, gasoil and kerosene prices was taken after careful consideration in view of the rapid increase in overall prices in China, the NDRC said in a question- and-answer posting on its website.
Crude prices in international markets this month reached the highest since October 2008, the NDRC said. However, taking into consideration the trend of prices and supply of oil products, the government did postpone the price hike and restricted its scale, the NDRC said in a question- and-answer posting published on its website.
But the government promised that the price move would not further deteriorate inflation, as the NDRC roughly estimated that the rise would only add 0.07 percentage points to December s CPI level, according to the statement.
To reduce inflationary pressure, the price of rail and urban public transport, freight, and the aviation fuel surcharge will not be increased, the NDRC said.
The NDRC also promised that subsidies would be given to low-income families, farmers, taxi drivers and other sectors that could be hurt by the price adjustment.
The NDRC explained that the rise in fuel prices was actually a move to restrain rapid increases in the country's oil consumption and boost energy conservation, as the commission estimated that China's dependence on imported oil is likely to hit 55 percent by the end of this year, from 33 percent in 2009.
China's dependence upon imported oil was about 53 percent in the January to November period, said the NDRC.
China last adjusted oil product prices on Oct 26, elevating retail ceiling prices Yuan 230/mt for gasoline and Yuan 220/mt for gasoil.
China has adjusted oil products prices four times this year, with three price hikes and one reduction.
Benchmark retail price of gasoline rose Yuan 0.23/liter and gasoil up Yuan 0.26/liter, C1 calculated. After the hike, the average retail price of 90-Ron gasoline is Yuan 8,530/mt and price of zero pour point gasoil reaches Yuan 7,780/mt, up 3.77 percent and 4.01 percent, respectively. C1 believed the price hike was a "modest one", as the hike was less than half of what the international crude oil has gained in the past month.
Hike delayed, yet unexpected
The price hike is a long-delayed, however, also an unexpected move as China is facing tremendous rising inflation pressure, with the country' s consumer price index (CPI) accelerated to a 28-month high in November of 5.1 percent.
As of Dec 20, the 22-working-day moving average price of Brent, Dubai and Cinta crude climbed 9.16%, C1 s data indicated.
The Chinese government adopted an oil pricing mechanism at the start of 2009 that allows the NDRC to adjust retail oil products prices when the weighted average price of the three international crudes change more than 4 percent over 22 straight working days.
Well considered by NDRC
The decision to increase gasoline, gasoil and kerosene prices was taken after careful consideration in view of the rapid increase in overall prices in China, the NDRC said in a question- and-answer posting on its website.
Crude prices in international markets this month reached the highest since October 2008, the NDRC said. However, taking into consideration the trend of prices and supply of oil products, the government did postpone the price hike and restricted its scale, the NDRC said in a question- and-answer posting published on its website.
But the government promised that the price move would not further deteriorate inflation, as the NDRC roughly estimated that the rise would only add 0.07 percentage points to December s CPI level, according to the statement.
To reduce inflationary pressure, the price of rail and urban public transport, freight, and the aviation fuel surcharge will not be increased, the NDRC said.
The NDRC also promised that subsidies would be given to low-income families, farmers, taxi drivers and other sectors that could be hurt by the price adjustment.
The NDRC explained that the rise in fuel prices was actually a move to restrain rapid increases in the country's oil consumption and boost energy conservation, as the commission estimated that China's dependence on imported oil is likely to hit 55 percent by the end of this year, from 33 percent in 2009.
China's dependence upon imported oil was about 53 percent in the January to November period, said the NDRC.
China last adjusted oil product prices on Oct 26, elevating retail ceiling prices Yuan 230/mt for gasoline and Yuan 220/mt for gasoil.
China has adjusted oil products prices four times this year, with three price hikes and one reduction.
