China raises gasoline, diesel prices as much as 8%

China, the world's second-largest energy user, raised gasoline, diesel and jet fuel prices by as much as 8 percent, the first increase in more than two months, as crude costs and demand climbed.

Pump prices for 90 octane gasoline will be set at a maximum of 5.98 yuan (88 cents) a liter, or about 22.6 yuan a gallon, in Beijing, the National Development and Reform Commission, China's top economic planner, said on its Web site yesterday. The price compares with an average of $2.682 a gallon in the U.S.

The increase will be China's fifth under a system introduced in December that keeps oil-product prices in line with global crude costs and ensures refiners a profit. The Chinese government is raising prices as the economy expands at the fastest pace in a year, spurring fuel consumption, and the international price of crude oil climbs.

"The fuel price adjustment will encourage refineries to boost production and guarantee domestic supply," the commission said in the statement. "It will also help energy conservation and reduce emissions," it said.

China controls fuel prices to keep inflation in check. Under the new pricing mechanism, the government may adjust prices when crude-oil costs change more than 4 percent over 22 working days, the reform commission said in May. China has revised prices eight times since December, including today's move, compared with two adjustments in 2008.

The fuel price increase will lift November's consumer price index reading by 0.12 percentage points, the commission said. Still, it does not pose an inflationary risk, it said.