China increases prices for oil and electricity

Source: Xinhua/Shanghai Daily  |   2008-6-20  |     NEWSPAPER EDITION

CHINA has decided to raise prices on refined oil and electricity.

The prices of gasoline and diesel will increase by 1,000 yuan (US$145.50) a ton, the National Development and Reform Commission said on its Website last night.

China will also raise aviation fuel prices by 1,500 yuan a ton, the top economic planner said. The prices of natural gas and liquefied petroleum gas, however, will remain unchanged.

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

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

On July 1, China will increase electricity prices by an average 0.025 yuan a kilowatt-hour, but urban and rural residents and sectors of farming and fertilizer production will be exempted from the increase, the NDRC said.

China will also impose temporary caps on thermo-coal prices until the end of this year, it said.

The NDRC said the oil-price adjustment was made to ensure supplies by narrowing the gap between rising international crude prices and state-set domestic oil prices.

The crude-oil price on the international market reached above US$136 a barrel on Wednesday, up more than 45 percent from the price when China previously raised oil prices in November last year.

The government lifted fuel prices by about 11 percent last November but kept them frozen at that level, seeking to avoid fanning inflation which has touched 12-year highs since the beginning of the year.

That policy, however, has led to shortages at the pump as refiners find themselves squeezed by rising oil and gas prices.

Shanghai on Monday increased the price for liquefied petroleum gas used by some taxis and scooters.