June 10th, 2011 | Caijing China’s Three Oil Giants may Get Pricing Power
China may give its three largest oil refiners pricing rights in the new proposed mechanism reforms.
The three biggest oil producers in China, known as PetroChina, Sinopec and CNOOC, may get pricing powers of oil products, when crude jumps above 130 U.S. dollars per barrel, China Business News reported, citing a government official.
The new refined oil products pricing mechanism, as well as a laddered power tariff system on resource prices, which will be introduced this year, will probably endow the three oil giants a right to adjust the prices of their products, Lian Qihua, a senior official of the National Development and Reform Commission, told an economic meeting Wednesday. The premise is crude oil prices stand at around 130 U.S. dollars a barrel, he added.
The new pricing mechanism will also shorten the periods between price adjustments from the current 22 working days, the report said.
The report quoted an industry expert as saying that the new move may indicate that when crude oil prices changed at a rate of up to 4 percent, oil stations could raise or reduce prices for gasoline or diesel fuel as they want, without the need to get approval from the government.
But he also stressed that the proposal was still under discussion, and he was unsure whether it would be put into practice.
Chinese premier Wen Jiabao in March this year, when delivering his government working report, ordered to improve the pricing formation mechanisms for refined oil products and natural gas, adding that such reforms should be taken after fully considering its people’s bearing capacity, especially those with low-income.