China hikes oil prices by highest rate in three years

SHANGHAI - Agence France-Presse

China hiked fuel prices yesterday by the biggest margin in nearly three years after a surge in the cost of global crude, the government and state media said.

The rise is the second this year and comes as the government has more leeway to adjust price levels, while inflation eases from three-year highs seen in mid-2011.

The benchmark retail price for petrol will rise by 0.44 yuan ($0.7) per liter, while the price for diesel rises by 0.51 yuan ($0.8), state planner the National Development Reform Commission (NDRC) said in a statement late on March 19. “This is a result of surging global crude prices and easing domestic inflationary pressures,” Liao Kaishun, an analyst at industry consultancy C1 Energy, told Agence France-Presse. “The NDRC might also have done it out of consideration for energy conservation and emission reduction, for which low resource prices will certainly do no good.”

The commission can adjust fuel prices when international oil prices move by more than four percent over a 22-working day period. Beijing limits rises in fuel costs to insulate domestic consumers when international prices rally. The latest move works out to a rise of about 600 yuan per ton, the largest since June 2009, the Xinhua news agency reported. After the increase, the benchmark price for petrol would rise 7 percent to 9,180 yuan per ton and diesel would rise 7.8 percent to 8,330 yuan per ton.