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China raises prices of oil, electricity

(Xinhua)
Updated: 2008-06-19 22:27

Drivers rush to refuel their cars in Beijing before oil prices are hiked at midnight June 19, 2008. China announced Thursday evening that gasoline and diesel prices would be hiked by about 18%. [asianewsphoto]

BEIJING -- China's top economic planner announced Thursday night the country will raise the prices of gasoline, diesel oil, aviation kerosene and electricity on Friday, revealing an unprecedented broad plan to raise energy prices.

Beginning Friday, the benchmark gasoline and diesel oil retail prices will be marked up by 1,000 yuan ($144.9) per ton, with the price of aviation kerosene up by 1,500 yuan per ton.

The prices of natural gas and liquefied petroleum gas, however, would be left unchanged, according to the National Development and Reform Commission (NDRC).

The benchmark retail prices of gasoline and diesel oil would be lifted to 6,980 yuan and 6,520 yuan per ton, up more than 16 percent and 18 percent respectively.

The price rises also translate into mark-ups of 0.8 yuan and 0.92 yuan per liter, the measurement used at service stations in China, for gasoline and diesel oil respectively.

The commission said the oil price adjustment was made to ensure supplies in the country by diminishing the gap between continuously rising international crude prices, especially since February, and state-set domestic oil prices.

Crude oil price on the international market reached above $136 per barrel on Wednesday, up more than 45 percent from the price when the country raised oil prices in November last year.

The government-controlled oil prices on domestic market should be blamed for a shortfall of supplies, as some refineries stopped or cut back on processing to avoid losses, said an unidentified NDRC official.

The commission said more subsidies would be offered to farmers, public transport, low-income families and taxi drivers to cushion the crunch of price rises.

For instance, farmers would get five yuan per mu (1/15 hectare) of farmland in extra subsidy; low-income families in cities would get an extra 15 yuan for each person every month starting from July, 10 yuan for such rural families.

The commission said fares for passenger travel by rail, urban and rural public transport and taxis would remain unchanged after the rise.

The official did not comment on the impact of oil price rises on the inflation rate, which eased to 7.7 percent in May. In April, it rose 8.5 percent after a 12-year high of 8.7 percent in February.

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