China raises gasoline, diesel prices by 3-5%

Shanghai, March 25 (Gasgoo.com) China started to raise gasoline, diesel prices today by 3% to 5% to reflect climbing crude oil prices, Xinhua news agency reported, citing China's top economic planning ministry.

The benchmark gasoline price was raised by 290 yuan ($42) a ton to 5,730 yuan, and diesel by 180 yuan a ton to 4,990 yuan, effective today.

The move more than offsets a price-cut in mid-January, when the National Development and Reform Commission (NDRC) cut benchmark pump prices of gasoline and diesel by 140 yuan and 160 yuan per ton, or 2 percent and 3.2 percent, respectively, the report said.

The commission said the increases were a result of recent rise in international crude oil prices. According to experts, more frequent price adjustments show China can respond more quickly to international oil price changes after a new pricing mechanism took effect on Jan. 1, 2009.

Under the new pricing mechanism, gasoline and diesel retail prices are allowed to float as long as they remain below the government's ceiling price. The mechanism aims to encourage competition among fuel suppliers and better reflect supply and demand.

China's crude oil output reached 190 million tons in 2008, up 2.3 percent year-on-year, the highest growth in three years, according to the China Petroleum and Chemical Association.

Imports of crude oil rose 9.6 percent year-on-year to 179 million tons last year, which accounted for 48 percent of total crude oil demand.

Staff members fill up some vehicles at a gas station in Beijing before
the fuel price rise at midnight of March 24, 2009.