China to raise retail fuel prices

Workers fuel vehicles at a gas station in Beijing, capital of China, July 19, 2013. According to National Development and Reform Commission, the retail price of gasoline and diesel oil in China will be raised by 325 Yuan (52.9 U.S.dollars) and 310 Yuan (50.5 U.S.dollars) per tonne respectively starting from July 20. (Xinhua/Zhao Dingzhe)

The retail prices of gasoline and diesel will be raised starting Saturday, the country's top economic planner said Friday.

The benchmark retail price of gasoline will be raised by 0.24 yuan per liter and diesel by 0.26 yuan per liter, the National Development and Reform Commission (NDRC) said in a statement on its website.

It will be the fourth price hike this year, as well as the biggest increase since September 2012. Gasoline and diesel prices also went down four times this year.

The NDRC last adjusted gasoline and diesel prices on July 6, cutting the benchmark retail prices of gasoline and diesel by 0.06 yuan per liter, to reflect falling international crude oil prices.

The price increase, as well as recent heavy rainfall in many parts of the country, will push up consumer prices, said Han Jingyuan, an analyst at www.315.com.cn, a commodity-related information provider.

China's consumer inflation rose 2.7 percent year on year in June, up 0.6 percentage points from a month ago.

Despite the hefty fuel price increase, its impact on downstream industries is not expected to last long, analysts said.

Under the country's new pricing regime, which came into effect in March, domestic fuel prices are adjusted when international crude prices reflect a change of more than 50 yuan per tonne for gasoline and diesel over a period of 10 working days.

Zhang Yonghao, an analyst at www.chem365.net, another commodity information consultancy group, said the price hike will help improve oil refiners' profits amid lackluster demand.

Han said oil prices are not expected to climb further in the near future, as slowing economies in the European Union and China will sap demand.