The latest price rises for gasoline, diesel and aviation fuel by 500 yuan (US$62.5) per ton take them closer to international market standards; and will save energy and promote fuel efficiency, planning officials said yesterday.

The increases will also contribute to sustainable development, National Development and Reform Commission (NDRC) officials said.

The price hikes, effective yesterday, are the ninth for refined oil products since July 2003; and the 10-per-cent rise is the highest since then.

"Higher prices on oil products will encourage efficiency," said Zhang Guobao, vice-chairman of NDRC, at a seminar; while Niu Li, an economist with the State Information Centre, said they would bring domestic oil prices more in tune with the world market.

Lower domestic prices have resulted in losses for oil refiners and encouraged consumer wastage, he noted.

An NDRC statement said prices of processed oil in China are far below the international levels as the price of crude hovers around  US$70 a barrel.

"The unreasonably low price was a key reason behind high resource consumption," an NDRC official said yesterday.

China's average resource consumption for per unit of GDP (gross domestic product) was 3.4 times the world average in 2004, statistics show.

Streets near gas stations were jammed on Tuesday night as car owners queued to grab the last chance to buy cheaper fuel.

"I didn't see the same scene the last time fuel prices were raised," said He Jun, a senior resource analyst.

The last price rise was on March 26, when the price of gasoline was raised by 300 yuan (US$37.5) per ton and diesel by 200 yuan (US$25) per ton.

The retail price of 93-octane gasoline is now 5.09 yuan (64 US cents) per litre, 0.44 yuan (5 US cents) higher.

But it is still way below the price in the UK, which hit 1 pound (15 yuan) in parts of the country this month.

"I will have to pay 50 yuan (US$6.2) more a month on gasoline after this rise," said Chen Yi, who earns 5,000 yuan (US$620) a month and is in the publishing industry.

Chen said gasoline was still affordable, but said he would think twice before getting behind the wheel.

Car dealers predict that more people would choose to buy small-engine cars to save fuel costs or hesitate to buy.

According to an online survey on www.sina.com.cn, one of China's leading portals, nearly 87 per cent of the 80,000 surveyed said they would reconsider plans to buy a car.

Huang Shan, a Beijing resident, said he would put off his car purchase plan. "As taxi fares have also risen, I think the best way is to take public transport," he said.
Xinhua contributed to the story.

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