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China hikes gasoline, diesel price

0 CommentsPrint E-mail Xinhua, February 20, 2011
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A worker adjusts the price tag at a gas station in Beijing, Feb 20, 2011.[Xinhua]

A worker adjusts the price tag at a gas station in Beijing, Feb 20, 2011.[Xinhua]

China will raise the prices of gasoline and diesel by 350 yuan (about 53.2 U.S. dollars) per tonne beginning Sunday, the National Development and Reform Commission (NDRC) announced Saturday evening.

The adjustment is the first this year but the second one in the past two months. The increase will hike the benchmark retail price of gasoline by 0.26 yuan per liter and diesel by 0.3 yuan per liter, the country's top economic planning body said in a statement on its website.

The hike came with an increase in the price of international crude oil, but the timing is "properly postponed" and the rise in price is somehow "limited", the statement said.

The Chinese government adopted an oil pricing mechanism at the start of 2009 that allowed the NDRC to adjust retail fuel prices when international crude oil prices change by more than 4 percent over 22 straight working days.

China last raised gasoline and diesel prices in late December last year by 310 yuan and 300 yuan per tonne, respectively.

According to Cao Changqing, head of the Department of Price of the NDRC, the government had considered factors, such as the current price situation, the Spring Festival season and the demand and supply conditions in the oil market.

The international crude oil prices had already jumped by more than 4 percent as early as Jan. 22, Cao said.

He added that the rise would be around 10 percent if the international price trend had to be followed. But by hiking gasoline and diesel prices by 350 yuan, the growth comes to about 4.5 percent.

Liu Zhenqiu, vice director of the NDRC's price department, said that the government would continue to provide subsidies to low-income families, farmers, taxi drivers and other sectors that could be hurt by the price adjustment.

China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent in January, which was lower than market expectations, but still higher than the 4.6 percent from last December.

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