China's National Development and Reform Commission (NDRC) on Thursday announced that it was raising wholesale prices of gasoline and standard diesel by 345 yuan (about 51.8 U.S. dollars) and 335 yuan (about 50 U.S. dollars) per tonne, respectively, effective October 30.
Prices of gasoline and standard diesel had been set to increase by 440 yuan and 420 yuan per tonne, respectively, but the latest adjustment reduced the increases by 95 yuan and 85 yuan per tonne, respectively.
The NDRC said in a statement that since a similar price adjustment on Oct 15, tensions in the Middle East had escalated, fueling a rapid rise in international crude oil prices.
The latest move aims to mitigate the impact of this surge on the domestic market, it said.
"Over the past ten working days, average international crude oil prices have risen sharply since the last price adjustment. To mitigate the impact on the domestic market and to strike a balance between easing the burden on consumers and ensuring the safe and stable supply of refined oil products, China has again introduced measures to adjust the prices of refined oil products," said Bian Zheng, director of the fossil energy price and cost division of the price cost and certification center of the NDRC.
According to China's refined oil pricing mechanism, maximum retail prices for gasoline and diesel are adjusted every ten working days in line with changes in the average price of a package of international crude oil products.
Since the Oct 15 price adjustment, the price of Brent crude oil futures has neared its high for the year.
"When the authorities implement measures to adjust fuel prices, they need to take into account both the ability of retail customers to pay, and the need to maintain market supply stability. It means that on the one hand, they should cap price increases as much as possible to cut the burden on consumers. On the other hand, they should also let oil refiners pass on a moderate portion of the import costs to consumers to avoid disruptions to production," said Chen Shouhai, director at the research center for oil and gas policy and law of China University of Petroleum.
China caps fuel price increase again amid escalating Middle East conflict
