August 01st, 2012 | Global Times NDRC may soon hike gas, diesel prices
The window for the National Development and Reform Commission (NDRC), the country’s top economic planning body, to increase prices on fuel oils may open as early as next week, given recent rises in international crude oil prices, analysts said Wednesday.
Data from several providers of market intelligence on the petroleum industry show that by Tuesday, the moving average of a basket of international crude oil prices – Brent, Dubai and Cinta – had risen by more than 4 percent from July 10. Currently, the NDRC uses this average as a reference of international prices when it comes to setting domestic fuel prices.
Under China’s fuel pricing mechanism, the NDRC can adjust gasoline and diesel prices when the average international oil price changes by more than 4 percent over a period of 22 working days.
“With the average price of international crude jumping by 4.90 percent so far (since July 10), conditions for a fuel price adjustment will likely be met next Friday,” Wang Jintao, an oil industry analyst at commodity information provider Zhongyu Information Technology Co, told the Global Times.
Yet, it is still hard to tell how much international oil prices may go up by then, as the global commodities market is now awaiting the US non-farm employment report for July, an important economic indicator due to be released this Friday, Wang said.
Moreover, since the NDRC has delayed fuel price hikes in the past out of consideration for inflation and consumer affordability, adjustments may not be immediately forthcoming once the window opens, Chen Qing, an oil analyst with industry information portal chem99.com, told the Global Times.
“If the NDRC lifts fuel prices in a timely manner this time, we expect gasoline and diesel prices to shot about 350 yuan ($55.37) per ton,” Chen estimated. “The upcoming raise will push up the country’s fuel prices back above the 7-yuan mark.”
Retail prices of diesel and 93-octane gasoline in most regions are under 7 yuan per liter, currently averaging 6.81 yuan and 6.99 yuan respectively nationwide, the Beijing News reported Tuesday.
By Wang Jiamei in Shanghai