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| The price tag at a gas station shows the new
gasoline price in Beijing yesterday. China yesterday raised the
price of refined oil products for the first time in three months, to
reflect the oil price spike on the international market.
(newsphoto) |
China Wednesday raised the price of refined oil
products for the first time in three months to reflect the oil price spike
on the international market.
The move also spells out relief for domestic refineries that have been
suffering losses because of rising crude oil costs.
The National Development Reform Commission
yesterday raised benchmark gasoline rates by 240 yuan (US$29) a ton and
diesel
prices by 220 yuan
(US$26.60) a ton. The price hikes represent about a 7 per cent increase
over the previous level.
China's current oil prices vary in different provinces and regions. Oil
companies are allowed to raise or drop retail prices by 8 per cent from a
government-set benchmark.
In Beijing, retail gasoline prices have hit a new
record high. The benchmark 90-octane
gasoline rose by 0.19 yuan (2.3 US cents) to 3.42 yuan
(41.4 US cents) a liter. The 0-octane diesel increased by 0.19 yuan (2.3
US cents) to 3.46 yuan (41.8 US cents) a liter.
Experts say the price adjustment is to catch up with the international
crude oil price hike.
New York oil futures peaked at US$48 a barrel last week. Prices have
gained 22 per cent since the end of June amid rising global demand and
risks to supplies from Russia, Iraq and Venezuela.
China pegged its domestic refined oil products to average rates in
Rotterdam, New York and Singapore.
Despite the price spike on the international market, the government
hasn't adjusted the prices since mid-May because the government is
concerned that the price increase may undermine its efforts to cool down
the economy.
Refineries, however, have to suffer heavy losses as they cannot pass on
rising costs of processing crude oil.
"The increase of refined oil prices is good news for refineries," said
Gong Jingshuang, an expert with Economic Research Centre with the China
National Petroleum Corp. "It is conducive to the bottomline of oil
companies, especially refinery-heavy Sinopec."
China's three largest oil producers - PetroChina
Ltd, Sinopec Corp and CNOOC Ltd - gained windfalls
in the first half of this year, thanks to the
crude oil price hike.
CNOOC yesterday reported its net profit increased 11.2 per cent
year-on-year to 7.0 billion yuan (US$850 million) in the first half of
this year.
Analysts say they believe Sinopec will achieve a half-year profit
increase of about 48 per cent while PetroChina's will increase by about 11
per cent in their interim reports later this week.
Gong said the demand for oil products will remain strong in following
months, despite the price increase.
A thriving car market, rising investment in power, infrastructure and
construction are boosting demand for oil products.
The rapid growth in demand for oil products has forced Chinese
refineries to run at top rates in previous months, leading to a crude oil
import surge in the first seven months of this year.
(China Daily) | 
Updated: 2004-08-26 11:16