Wednesday, March 23, 2005

Oil_China increases gasoline prices

China's energy regulator raised gasoline prices today in response to the soaring oil price in the world market, leading to the increase of the retailed gasoline prices across the country.

The National Development and Reform Commission(NDRC), which oversees the country's industrial policies and sets utility prices, raised the ex-refinery rate, the so-called producer price for the gasoline, by 300 yuan ( about US $36 ) per ton from today, the first time since last August. Following NDRC's announcement, the country's largest oil producer, China National Petroleum Corp (CNPC) and Asia's top refiner China Petroleum Chemical Corp (Sinopec), marked up petrol prices about 7 per cent higher at their outlets nationwide. A detailed list of prices could be reached here(in Chinese). In Beijing, prices have increased by 0.23 to 0.27 yuan, to around 4 yuan (about US$0.5 ) per liter.

In the report posted on NDRC's website, it urged CNPC and Sinopec to "make measurable adjustment" on the retailed petrol prices and diesel oil, reported People's daily. The price of diesel oil remains unchanged after the adjustment. The comparatively low Diesel oil is often used in agriculture sector in China, but cars using diesel oil are limited to travel in cities such as Beijing and Shanghai for the reason of environment protection.

"How come NDRC only raised the gasoline price when oil prices grow up, without reducing it when oil prices is down?" One of my friends who had a car for almost two years. He said he had to spend 48 yuan more, 8 per cent higher than he used to afford. He has changed his MSN name to "Damn NDRC".

Oil price has risen nearly 28 percent to above US$55 a barrel(amount to about 159 liter), this year as dollar weakness encouraged funds to switch money out of treasury markets and into commodities. Booming demand in the United States and China is also straining global production capacity. The gap between the oil price and the retailed gasoline price in China is about US$25 a barrel.

Separately, Petrol China, CNPC's Hong Kong listed branch, reported about 50 per cent rise in net profit to 102.92 billion yuan for last year, nearly half of what ExxonMobil earned . Its output reached 778 million barrels in 2004.

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