Chinese fuel prices to change more often

China’s new oil pricing mechanism will enable the government to make more frequent price adjustments based on global crude fluctuations, a senior economic planner said. China has raised gasoline prices by 4.6% and diesel by 3.2%, saying the rise reflected a recent sustained increase in international crude oil prices. This was the first increase in domestic fuel prices since December when China introduced a “perfected” fuel pricing system. The government will further perfect the system and management while various market players should adapt themselves to the frequency of price ups and downs the National Development and Reform Commission (NDRC) said. A top oil firm executive has said that China will adjust domestic fuel prices when international oil prices rise or fall more than 4% within 22 straight working days. Dismissing criticism that Chinese drivers are now paying more than their U.S. peers to fuel their cars, NDRC said that the Chinese oil price includes fuel tax. Stripping out the tax, Chinese oil costs are at a similar level with other nations. (March 26, 2009)