Two staff members change the price tag
at a gas station in Beijing, Dec. 19. The country slashed the benchmark
prices for fuel from 6.37 yuan (0.93 U.S. dollar) per litre to 5.46 yuan
starting Friday morning. (Xinhua Photo)
BEIJING, Dec. 19 (Xinhua) -- Taxi driver Qu waited
patiently in the December night chill as a gas station boy changed the price
tag, which indicated China's unified fuel price cut effective early Friday
The country slashed the benchmark prices for fuel
from 6.37 yuan (0.93 U.S. dollar) per litre to 5.46 yuan starting Friday
morning, which was earlier than the long-awaited government scheme on fuel
taxation and pricing slated for Jan. 1 next year.
"The price cut of 0.91 yuan per litre means a monthly
saving of900 yuan for a taxi driver," said Qu, waiting in Thursday's midnight
dark for the clock to turn zero.
The government distributed
the news of the price cut via all major media and short messages
to cell phone users on Thursday evening.
A taxi driver
refuels his car at a gas station in Shanghai, east China, Dec.
19, 2008. (Xinhua Photo)
Nevertheless, there was no queuing-up at the gas
station in the early morning hour. The station boy said long queues appeared in
previous price rises this year.
The National Development and Reform Commission (NDRC)
made it clear Thursday that domestic fuel prices would remain unchanged on Jan.
1, 2009, when the fuel tax is expected to kick in.
This round of price cut was China's revamp of its oil
pricing system to let it pegged with the global market.
"The pricing would reflect the global market supply
of oil resources and let the market play a fundamental role," said Zhao Jiarong,
an official with the NDRC.
"The latest cut would narrow the gap between
wholesale and retail prices. Consumers would benefit from it," said Xu Kunlin,
another NDRC official.
A worker changes oil prices at a gas
station in Qingdao, a coastal city in east China's Shandong Province, Dec.
19, 2008. (Xinhua Photo)
Zhou Dadi, an energy researcher, said his calculation
showed the factory gate fuel price would drop by 2,000 yuan per tonne and the
pre-tax retail price would be down by 1.7 yuan per liter after the price cut.
A fuel trader said there might be a hoard purchase
before the fuel taxation effective on Jan. 1 next year.
Bai Chongen, an economist from Tsinghua University,
said the post-tax retail price would remain unchanged next year as fuel
producers would lower the factory gate price again to offset the tax.
But for fuel producers, the price cut reduced their
sales profit. "It will have a short-term impact on our profit, but we expect the
global prices to rise in future. This will secure the long-term profit," said
Shu Zhaoxia, a researcher with Sinopec, Asia's largest refiner.
Experts said the country's first fuel price cut in
almost two years would help revitalize companies and factories eking out in a
Among industry beneficiaries, the aviation sector
would see an immediate effect because the benchmark prices for jet fuel was
slashed by a bigger margin of more than 30 percent, or 2,400 yuan, to 5,050 yuan
An Air China spokesman said the cut would definitely
boost the aviation industry as the drop was beyond airliners' expectation.
A Guojin Securities analyst said based on the
forecast 2009 jet fuel consumption of 11.47 million tonnes, the price cut would
lead to a cost reduction of 27.5 billion yuan for the country's aviation
Oil drops to $36 as demand concern outweighs OPEC
NEW YORK, Dec. 18 (Xinhua) -- Crude oil
tumbled more than 9 percent Thursday as OPEC's record output cut failed to ease
growing demand concerns brought by deepening economic recession.
Light, sweet crude for January delivery shed 3.84 U.S.
dollars to settle at 36.22 dollars a barrel on the New York Mercantile Exchange.
Price dropped to 35.98 dollars a barrel, the lowest level last seen in June
2004. Full story
OPEC makes deepest-ever cut to shore
up prices, but no quick fix
Algeria, Dec. 17 (Xinhua) -- OPEC on Wednesday agreed on a deepest-ever net cut
of 2.2 million barrels per day (bpd) as of Jan. 1, bringing the total output cut
in 2008 to 4.2 million bpd, in another attempt to bolster sagging oil prices
under the global economic slowdown.
Yet analysts say it still costs the Organization of
Petroleum Exporting Countries (OPEC) several months and even further cuts to
harvest at the level it is craving for, ruling out the possibility of a quick
fix in the volatile market. Full story
OPEC extraordinary meeting opens amid
output cut expectation
ORAN, Algeria, Dec. 17 (Xinhua) -- The Organization of
Petroleum Exporting Countries (OPEC) convened the 151st extraordinary
ministerial meeting here Wednesday in expectation of an output cut decision to
shore up the plunging oil prices.
Ministers from the 13-member oil cartel gathered in
northwestern Algerian coastal city of Oran, exploring an agreement to address
the slide of oil prices, which have shrunk more than two thirds from record
mid-July highs above 147 U.S. dollars in the face of a global economic downturn.
China approves scheme on fuel
BEIJING, Dec. 18 (Xinhua) -- China has approved a
long-awaited scheme on fuel taxation and reform of the country's refined oil
pricing mechanism, the country's economic planner said Thursday.
The State Council had decided to put the scheme into
effect on Jan. 1, 2009, said the National Development and Reform Commission. Full story
China explains more on proposed reform
of fuel tax, pricing
BEIJING, Dec. 6 (Xinhua) -- China on Saturday gave further
explanation on the proposed reform of fuel tax and pricing in a bid to dispel
misunderstanding that a higher consumption tax will mean higher pump prices.
The authorities on Friday released a draft reform plan to
solicit public opinions till Dec. 12. It had been long advocated by experts as
key for energy saving and economic structure transform. Full story