China will raise the price of gasoline, diesel oil and aviation kerosene by RMB500 per tonne, almost a 10 per cent rise, from 1 November, state media reports. The average retail price of gasoline and diesel oil will rise to RMB5,980 and RMB5,520 per tonne from RMB5,480 and RMB5,020, respectively.
The adjustment was made “to shorten the gap between high-flying
international crude prices and state-set domestic oil prices,”
according to the National Development and Reform Commission. "If the
crude price is USD80 per barrel, domestic refineries will lose RMB600
for each tonne of crude they process, and RMB1,000 for each tonne of
oil they produce," said Liu Zhenqiu, Vice Director of the Pricing
Department of the NDRC.
States news agency Xinhua adds that, “The government-controlled oil
prices in the domestic market had been blamed for a shortfall of oil
supply, as some refineries would stop processing to avoid losses, while
some producers and dealers would hoard up oil to gain more profit in
case of possible price hikes.”
Xinhua quotes the NDRC as promising not to pass on fuel cost rises to
the public by way of surcharges on railway tickets, natural gas for
home usage and public transportation. “However, prices of railway cargo
transportation, aviation passenger services and highway transportation
might rise.” China will also raise the price of natural gas for
industrial production.
Last update : Friday, 02 November 2007
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