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BIZCHINA / News
Most expect fuel prices to rise
By Liu Jie (China Daily)
Updated: 2007-08-03 09:24
China's gasoline and diesel prices are expected to rise soon, with the
driving forces likely to be big refiners' request for a price rise and
the growing domestic inflationary pressure, in addition to the global
crude oil price rise.
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A worker adjusts fuel oil prices at a gas station. China's gasoline and
diesel prices are expected to rise soon. [newsphoto]
In a survey conducted by China Daily's website www.chinadaily.com.cn,
52.16 per cent of the 1,135 respondents, or 592 people, said they
believed a price rise is coming, while 28.63 per cent, disagreed, with
the rest offering no comment.
The survey question was: "The soaring global oil price is putting
pressure on China, where the cost of fuel is expected to rise. Do you
think this will be the case? Why?"
Though most respondents said oil prices in the country will eventually
rise, they pointed out that the reason may not be that simple.
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"CNPC (China National Petroleum Corporation) and Sinopec (China Petroleum
and Chemical Corporation) will surely seize every possible opportunity to
raise prices," said a participant, who added that the dominant positions
of the behemoths grant them a bigger bargaining power in the market.
Another survey participant shared the same view saying that though the
country's two largest oil companies are complaining about losses because
of rising prices on the world market, they have made thousands of
billions of yuan in net profit and their employees still get fat pay.
The National Development and Reform Commission (NDRC), the country's top
economic planner, is reportedly under pressures from refiners to raise
gasoline prices. CNPC and Sinopec recently joined a group of applicants
to seek a price hike for refined oil products.
The producers suggested NDRC should raise gasoline prices by more than
220 yuan per ton and diesel prices by roughly 150 yuan per ton. Sinopec
said it would suffer losses of more than $10 in refining every barrel of
imported crude oil.
Accumulating inflationary pressure is also being seen as a possible
trigger for the likely hike in fuel prices.
Some respondents also said limited resources may lead to the coming fuel
price rise along with high oil exploration costs, China's attempts to
liberalize its gasoline and diesel prices as well as energy-saving
concerns.
Some respondents who said they believed fuel prices would not rise said
China is already under high inflationary pressure. That may intensify if
fuel prices are raised.
"Any rise in fuel prices will push up prices of everything from
agriculture and transportation to manufacturing, thus leading to another
round of inflation," a respondent said.
Cao Changqing, pricing department director of NDRC, has said the
government is considering subsidies for crude oil refiners to help them
meet the growing demand and maintain price stability.
China has started reforms to gradually deregulate refined oil prices but
prices of gasoline and diesel are still regulated.
Reforms have gathered pace since last year, with prices being raised
twice. But the momentum has slowed down this year as global oil prices
rose sharply in March and June.
Some respondents said the government should do more to encourage
alternative energy sources given the skyrocketing prices of oil
internationally and limited oil resources.
(For more biz stories, please visit Industry Updates)
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