China to raise energy prices
China will raise the prices of gasoline, diesel and aviation fuel by 8% beginning Friday, the government’s main economic planning agency announced, in a move that could dampen the booming Asian nation’s oil consumption.
The announcement sent oil prices downward Thursday morning in New York, where light, sweet crude for July delivery fell US$2.80 to US$133.88 a barrel on the New York Mercantile Exchange, but dipped more than US$3 at times.
In an announcement issued late Thursday in China after local financial markets were closed, the National Development and Reform Commission said prices of gasoline and diesel would rise by 1,000 yuan (US$145) per ton to 6,980 yuan (US$1,015) and 6,520 yuan (US$949) respectively.
Aviation kerosene will rise by 1,500 yuan (US$218) per ton to 7,450 yuan (US$1,084), the commission, known as the NDRC, said on its Web site.
Electricity prices will also rise for most businesses by 0.025 yuan (0.36 US cents) per kilowatt, although residential housing and the farming and fertilizer industries would be exempt, the planning agency said.
Natural gas and liquefied petroleum gas prices will remain unchanged, it said.
The government hiked fuel prices by about 11% in November but had 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 world oil and gas prices.
To help counter such shortages, China’s largest city, Shanghai, on Monday announced an increase in prices for liquefied petroleum gas used by scooters.
Earlier this week, the economic planning agency said it would look for an opportunity to adjust oil product prices, prompting a rally in shares of major refiners that have been swallowing huge losses due to soaring crude oil prices.
Promoting conservation
In an explanatory note accompanying its announcement, the commission said high world oil prices had created "contradictions in the purchasing price of oil being higher than the selling price of refined products that were becoming more glaring by the day."
That had led some refiners to halt or suspend production, creating supply interruptions and long lines at some filling stations, it said.
An "appropriate rise" in the price of refined products would "be beneficial to alleviating the difficulties enterprises were having in managing production," it said faxless payday loans no teletrak payday loans. It would also boost domestic output of such products, ensure supplies, and "promote the conservation of energy resources," the commission said.
Coal prices that have risen 80 yuan (US$12) in the past two years have created massive losses for four of the country’s five major power producers, it said.
Along with the electricity price rise, the government will also continue to subsidize the industry to guarantee supplies, the commission said.
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