China, the world's second
biggest energy consumer, raised prices of oil products for the first time in
eight months to help refiners cover costs after crude oil prices surged to
record levels.
From today, ex-factory gasoline prices were increased by 300 yuan ($37) a
metric ton and diesel prices by 200 yuan per metric ton, the National
Development and Reform Commission, the nation's top economic planner, said today
in a statement on its Web site.
The central government, which controls diesel and gasoline prices to limit
their impact on inflation, is authorizing higher prices to help the nation's
refiners cover rising oil costs.
Oil reached a record of $70.85 a barrel on the New York Mercantile Exchange
on Aug. 30 and has risen 17 percent over the past year. China's government last
adjusted fuel prices on July 23.
"The wide pricing gap between international oil prices and domestic refined
products is affecting market supply and steady development of the economy," the
commission said in the statement. ``China's economy is growing at an accelerated
pace and demand for oil continues to rise.''
Ex-factory prices of gasoline supplied to the government's reserves rose to
4,700 yuan a ton from 4,400 yuan, diesel prices to 4,070 yuan from 3,870 yuan,
military-use kerosene to 4,090 yuan from 3,890 yuan, and aviation gasoline to
4,840 yuan from 4,530 yuan, the statement said.
The government also raised ex-factory prices for jet fuel to between 4,840
yuan a ton and 5,470 yuan a ton, without providing comparative numbers, the
statement said.
Subsidies
Companies such as China National Petroleum Corp. and China Petrochemical
Corp., the nation's two biggest oil companies, are allowed to set retail prices
of gasoline and diesel and fuel supplied to commercial airlines and transport
sector at 8 percent above or below the government's recommended prices, the
commission said.
Oil companies won't be allowed to make the adjustments for retail prices of
diesel sold to the fishery industry, it said.
In a separate statement, the commission said it will set up a subsidy system
for selected industries including fishery, state-owned forestry companies and
public transportation companies, to compensate for the price increase.
Farmers who grow grains will get subsidies to compensate for the impact
caused by the higher diesel oil and chemical fertilizer costs, the statement
said, without stating the amount. City government can offer subsidies to taxi
driver to help reduce the effect of the increase in fuel prices, it said.
Euro III
To help refiners cover the higher costs of processing fuels to meet ``Euro
III'' emission standards in Beijing, the recommended retail price of gasoline
was raised by 460 yuan a ton, and diesel by 340 yuan a ton, compared with a gain
of 250 yuan a ton for gasoline and 150 yuan a ton for diesel countrywide, the
statement said. The ``Euro III'' standards are automobile emission restrictions
that the European Union adopted in 2000 to regulate the amount of sulfur in
gasoline and diesel.
In Beijing, retail prices for 93 RON grade gasoline rose to 4.31 yuan a liter
from 3.94 yuan, and zero-grade diesel prices increased to 4.04 yuan a liter from
3.74 yuan, the capital city's planning commission said in a separate statement.
RON is the research octane number that indicates the quality of the gasoline.
The U.S. is the world's biggest energy consumer.