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China to reform gasoline pricing mechanism

0 Comment(s)Print E-mail Xinhua, March 6, 2013
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China's top economic planner said Wednesday the country is studying a new fuel pricing scheme to make it reflect the global markets' oil price fluctuations more swiftly.

Zhang Ping, head of the National Development and Reform Commission (NDRC), said the top economic planner spotted two major defects in the current oil product pricing mechanism, referring to the 22-working-day cycle and a 4-percent fluctuation in global oil prices as an adjustment flip-flop.

"The current mechanism fails to timely reflect the volatility in global oil prices," Zhang told a press conference Wednesday on the sidelines of the parliament's annual session. [More about the press conference]

The NDRC announcement came after a gasoline price hike on the Chinese mainland and a downward adjustment in gas price in Taiwan on Feb. 25 triggered widespread complaint about the mechanism.

Under the mainland's oil product pricing system introduced in 2009, domestic fuel prices may be adjusted when crude oil prices in Brent, Dubai and Cinta change by more than 4 percent over 22 working days.

"Fuel consumption is in the interests of millions of households. And I've heard and quite understood the criticism against the current pricing mechanism," Zhang said.

The plan to reform the current pricing mechanism will shorten the 22-working-day cycle and remove the 4-percent fluctuation limit, Zhang said.

"We will raise or cut fuel prices more swiftly accordingly and make our fuel pricing mechanism more flexible and more adaptive to fluctuations in global oil prices," he added.

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