Chinese ministry rules out sudden fuel price hike

Source: China Daily | 05-09-2009 10:28

BEIJING, May 9 -- The government ruled out any immediate increase in fuel prices on Friday despite increasing market speculation about a possible hike, top pricing officials said.

Officials at the National Development and Reform Commission (NDRC) said the recent oil price rise on the global market indicated that the domestic fuel prices should be raised.

But Xu Kunlin, deputy director of NDRC's pricing department, told a news briefing on Friday that the authorities would only increase prices after further careful consideration.

According to the fuel pricing mechanism announced on Friday, China will adjust its fuel prices when global crude oil costs fluctuate more than 4 percent over 22 straight working days.

The global crude oil price has been increasing since March, rising from 35 U.S. dollars a barrel to around 58 U.S. dollars on Thursday.

This was the first time the government made public its fuel pricing mechanism since it announced last December that it would link domestic gasoline and diesel prices to the international market.

Xu said many oil traders had engaged in speculative dealing in recent days amid rumors of a price hike. "To prevent speculative trading, we will not adjust oil prices exactly in line with the benchmarks set in the regulation."