BEIJING, Jan. 15 -- Gasoline and diesel will be cheaper from Thursday, and
the country's top economic planner could cut retail fuel prices more frequently
to take them closer to global market levels.
The National Development and Reform Commission (NDRC) Wednesday announced
cuts in gasoline and diesel prices by 140 yuan (20.5 U.S. dollars) and 160 yuan
a ton, or by 2 and 3.2 percent, respectively.
But it did not say whether the cuts were for the factory gate price or
retail market. Nor did it specify how the cuts would affect the range of prices
for various grades of fuel or in different parts of the country.
Top quality gasoline in Beijing cost 5.80 yuan Wednesday. "The cut will
bring down the price of retail gasoline by a little more than 0.1 yuan a liter,"
said Niu Li, senior economist with the State Information Center, a government
think tank.
"This round of price cut is aimed at revamping the country's fuel pricing
system to take it closer to global levels," Niu said. "The government may do it
(cut) more often" to achieve that goal.
The NDRC cut retail fuel prices by as much as 18 percent on December 19,
the first time in almost two years. But some people complained that the prices
were still much higher than in many other countries.
The benchmark crude oil price on the New York Mercantile Exchange traded at
38.84 U.S. dollars a barrel yesterday, 73 percent below its July peak of
147.27 U.S. dollars because of the global slowdown.
Niu said the cuts would not have a serious impact on the country's two
largest refiners, China Petroleum & Chemical Corp and PetroChina Co.
Instead, they would boost their sales.
"Right now, the domestic demand for fuel is rather weak, and the price cut
will help raise it. So it should be good news for them," he said.
Falling oil demand has already sparked a price war among retail companies
in many parts of the country.
In Zhejiang province and Shanghai city, the retail price of gasoline has
been cut to as low as 4.70 yuan a liter, about 13 percent lower than in Beijing.
And in suburban Beijing, several filling stations have cut prices under the
disguise of sales promotion.
(Source: China Daily)
