The National Development and Reform Commission has decided to raise retail diesel, gasoline and jet fuel prices by about ten percent. Thursday's move comes in response to the surging price of crude oil on the global market.
Crude oil futures hit 94 US dollars per barrel on the New York Mercantile Exchange on Wednesday, the highest since trading began in 1983. Oil is up 58 percent from a year ago.
In response, the Chinese government raised the base retail price of diesel and gasoline by 500 yuan per ton. And the average retail price will be further increased by eight percent. It will translate into an increase of 0.4 yuan and 0.46 yuan for a liter of gasoline and diesel, respectively.
Since the start of 2003, China's domestic gasoline prices have risen by about two-thirds and diesel prices by 71 percent. Meanwhile, global crude oil prices are up nearly threefold.
The commission notes that the service charges of related industries, like railway cargo transportation and aviation, will be adjusted accordingly. But the prices of rail fares, urban public transport, rural road passenger transportation, and civil natural gas will not be raised. And it says local governments should subsidize the taxi industry to maintain cab drivers' incomes, before deciding whether to increasing taxi fares.
China's CPI grew 4.1 percent in September. The commission believes that the increase in oil prices will not drive the figure higher. But it says although the direct impact of the price increase is limited, the government should strictly monitor and control any possible chain reactions.