Beijing — China raised regulated ceiling prices for retail gasoline and diesel in the sharpest increase since March 2022 on Monday, following a surge in international oil prices due to the U.S.-Israeli war on Iran.
Gasoline and diesel retail price caps in the world’s second-largest oil consumer will increase by 695 yuan ($100.46) and 670 yuan ($96.84) per metric ton, respectively, from Tuesday, according to a notice from the National Development and Reform Commission. The previous adjustment was made on February 24.
International benchmark Brent crude futures had climbed 27%, and West Texas Intermediate crude (WTI) futures were up by 35.6% last week.
China last week asked refiners to halt fuel exports and try to cancel shipments already committed as the Iran war curbed refinery output, several people with knowledge of the matter said on Thursday.
China’s state planner reviews retail gasoline and diesel prices every 10 working days and applies uniform adjustments nationwide, though benchmark prices vary by region.
The adjustment rate reflects changes in international crude oil prices while also taking into account average processing costs, taxes, distribution expenses and appropriate profit margins.
China allows retail gasoline and diesel prices to float freely between floors and ceilings. However, when international crude prices reach $130 per barrel, retail fuel prices are generally not raised or are raised only minimally. When crude prices fall to $40 per barrel or below, retail fuel prices are calculated as if crude were priced at $40, with normal processing margins, according to the price adjustment mechanism.
($1 = 6.9185 Chinese yuan renminbi)
Reporting by Sam Li, Lewis Jackson and Colleen Howe; Editing by Aidan Lewis and Andrei Khalip – Reuters
