On March 23, Chinese authorities raised state prices for gasoline and diesel fuel, but at the same time limited this increase to almost half of the level that could have been without intervention. Such a step should protect consumers from a sharp jump in world oil prices and support economic stability in the country. This is reported by Reuters.
It is noted that this increase was the largest in the entire period of observations. At the same time, without the use of a mechanism to restrain the rise in prices, the increase would have been much more noticeable. According to the regulator’s decision, the maximum prices for gasoline have increased by 1,160 yuan, or $168, per ton, and for diesel fuel by 1,115 yuan.
After the introduction of the new tariffs, refueling a 50-liter tank for a private car owner will cost about $6.5 more. Against this background, Chinese social networks are increasingly discussing the transition to electric vehicles as an alternative to expensive fuel.
State price regulation is also increasing pressure on oil refineries. In particular, profits at refineries in Shandong province have already fallen to their lowest level in three years. The high cost of raw materials, coupled with weak consumer demand and a ban on fuel exports, is leading to the accumulation of excess inventory in warehouses and increasing losses in the industry.
