China's National Development and Reform Commission announced on April 7 that, based on the refined oil pricing mechanism, domestic gasoline and diesel prices should have increased by 800 yuan and 770 yuan per tonne respectively, effective from 24:00 on April 7. After regulatory adjustments, the actual increases were limited to 420 yuan and 400 yuan per tonne. Experts indicated that since the last fuel price adjustment on March 23, international crude oil prices have experienced significant volatility. To mitigate the domestic impact of rising global oil prices, the government continued to implement measures to control fuel price increases.
According to Lü Zhichen, Deputy Director of the NDRC's Price Cost and Certification Center, the maximum retail prices for gasoline and diesel should have risen by 800 yuan and 770 yuan per tonne, but actual increases were held to 420 yuan and 400 yuan per tonne, representing reductions of 380 yuan and 370 yuan respectively. This translates to a reduction of 0.31 yuan per liter for 92-octane gasoline and 0.32 yuan per liter for 0-grade diesel. Preliminary estimates suggest that private car owners will save approximately 15 yuan per tank of fuel, while heavy truck operators could save between 150 yuan and 200 yuan per refueling.
Why were fuel prices still increased despite regulatory measures? Dong Xiucheng, a professor at the University of International Business and Economics, explained that the intensity of fuel price controls must balance multiple factors including market supply security and downstream affordability. The approach aims to prevent excessive price volatility from overly impacting downstream consumers while appropriately reflecting crude oil import costs to ensure stable fuel supply.
What additional measures might be implemented if international crude prices rise significantly in the future? China's fuel pricing mechanism stipulates that maximum retail prices for gasoline and diesel be adjusted every ten working days based on changes in a basket of international crude oil averages. Lü Zhichen noted that the pricing mechanism includes an upper limit of $130 per barrel. If the average price of the international crude basket continues to rise substantially above $130 per barrel (corresponding to domestic 92-octane gasoline retail prices slightly exceeding 10 yuan per liter), price increases for gasoline and diesel beyond that threshold would be limited or suspended.
Dong Xiucheng cited the example of the 2022 period when Russia-Ukraine conflict drove sharp increases in global oil prices. According to the pricing mechanism, when international crude prices exceeded the $130 per barrel ceiling, domestic fuel prices were temporarily frozen for up to two months, with phased subsidies provided to refining enterprises.
The NDRC will guide fuel production and sales enterprises to ensure adequate production and distribution, maintaining stable market supply. It will also collaborate with relevant departments to strengthen market supervision, strictly penalize violations such as non-compliance with national pricing policies, and safeguard market order and consumer interests.
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