China hikes gasoline and diesel prices by $33-35/tonne

26 October 2010 06:17  [Source: ICIS news]

SHANGHAI (ICIS)--China increased its gasoline and diesel prices by yuan (CNY) 220-230/tonne ($33-35/tonne) in line with international crude prices, China’s National Development and Reform Commission (NDRC) said in a statement on Tuesday.

Gasoline prices were raised by CNY230/tonne at CNY7,420/tonne while diesel prices had increased by CNY220/tonne to CNY6,680/tonne, according to the statement on NDRC’s website.

The latest price revision, which comes into effect from Tuesday, would help NDRC further improve and perfect the current oil price mechanism, China’s economic planning body said.

Under the scheme, the Chinese government may adjust fuel prices when crude oil costs change more than 4% over 22 working days.

“We aim to perfect the pricing mechanism although it has already played an important role on the reasonable price and smooth market supply,” said a source from NDRC.

“It may lead to some speculative activities under the long-cycle price adjustment, which is bad for the market. The key is to collect public suggestions to perfect the pricing mechanism in the near future,” he added.

While China increased fuel oil prices for the first time this year in April, the country cut gasoline prices by CNY 230/tonne to CNY7,190/tonne, and diesel by CNY220/tonne to CNY6,460/tonne on 1 June 2010.

($1 = CNY6.66)

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By: Dolly Wu
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