Crude oil prices have hit the trigger amount for adjusting China's domestic fuel cost.
Pumping up China's fuel demand Image: YaoWenguo |
The 22-day moving average price of Brent, Dubai and Cinta was 4.3% above the level at which China last adjusted its fuel prices, analysis from consultants C1 Energy revealed.
In the past, an increase or fall in crude oil benchmarks by 4% or more over a 22-day period, compels the nation’s economic planners to adjust the price of the nation’s fuel.
C1 Energy expects the government may increase prices by 360 yuan ($57.7) per ton, despite cutting them by 310 yuan last November. In Shanghai, this hike would see pump prices for the commonly-used 93-octane gasoline increase to well above 8 yuan per litre from 7.75 yuan today.
However, increased consumption as a result of travel over the Chinese New Year period, the government may decide to hold back adjustments until March. An increase in fuel costs in February would put heavy inflationary pressure on the hundreds of millions of people still travelling over the New Year holdiay period.
Many in the industry have called for an improved pricing scheme that better reflects refining costs and shortens the adjustment periods to which pump prices are linked.