China, Asia’s biggest oil consumer, increased retail gasoline and diesel prices for the first time this year after crude oil in London rose above US$100 a barrel.
Prices of both gasoline and diesel will rise by 350 yuan (US$53) a tonne starting today, or as much as 4.6 percent, the National Development and Reform Commission (NDRC) said on its Web site on Saturday. Gasoline in Xinjiang cost 8,265 yuan a tonne and diesel was at 7,630 yuan a tonne before the increase, the lowest among all provinces.
The government boosted prices after crude in London rose to its highest in more than two years as civil unrest spread in the Middle East.
China last increased gasoline and diesel prices by 4 percent on Dec. 22, based on a mechanism introduced in December 2008 that allows the NDRC to revise fuel prices when crude costs change by more than 4 percent over 22 working days.
“This isn’t enough if we benchmark against how crude has risen. We’ll need another price increase,” Brynjar Eirik Bustnes, an analyst at JPMorgan Chase & Co, said by telephone from Hong Kong. “This one will allow refiners to avoid bigger losses, but certainly it’s not going to give them profits.”
Brent crude on the ICE Futures Europe exchange in London has risen 9.5 percent since China’s last fuel price adjustment, reaching a two-and-a-half year high during the past week.
China Petroleum & Chemical Corp (中國石化) and PetroChina Co (中石油) are the nation’s largest oil refiners.
The ex-factory cost of No. 3 jet fuel will increase from 5,990 yuan a tonne to 6,340 yuan a tonne, according to a separate statement posted on the NDRC’s Web site on Saturday.
Higher gasoline and diesel prices will add to costs for manufacturers and farmers. -Consumer-price inflation accelerated to 4.9 percent last month from 4.6 percent in December.