Reform to bring down pump prices

Source: Xinhua  |   2008-12-10  |     NEWSPAPER EDITION

CHINA'S existing pump prices will go down a bit as the country begins a reform of fuel taxation and refined oil product pricing system, which is expected to take place on January 1, an official said in Beijng yesterday.

Xu Kunlin, vice head of the pricing department at the National Development and Reform Commission, told reporters that there was room to lower the country's current fuel prices. Current pump prices in China, if converted, were equivalent to a world crude oil price of US$83.50 a barrel, he said.

"When the fuel taxation reform begins, we will adjust the fuel prices based on the world oil price then," Xu said.

On Monday, global crude oil recovered from last week's losses and stood at above US$43 a barrel on the New York Mercantile Exchange.

Currently, Chinese drivers are paying much more than those in many countries because domestic fuel prices have been unchanged since June despite a plunge in world crude oil prices. Government-set prices are changed only infrequently.

Take No. 93 gasoline, the most commonly used fuel. The current price stands at 6.37 yuan (93 US cents) per liter in Beijing and 6.05 yuan in Shanghai.

It is higher than in the United States. The US Energy Department said the average weekly retail price of gasoline fell to US$1.699 a gallon (equivalent to about 3.8 liters) as of Monday, the lowest point since February 2004.

Last Friday, the commission, along with three government bodies, unveiled a draft on fuel taxes and refined oil product pricing.