BEIJING, July 1 (Xinhua) -- China's latest fuel price
hike from Tuesday would certainly pinch the pockets of consumers, but may not
leave a lasting impact on the nation's economic recovery, analysts said.
Gasoline, diesel and jet fuel prices in the country
were raised by as much as 11 percent from Tuesday, the third increase this year
and the second in June, to reflect recent price changes in the global oil
market.
For many like the 24-year-old fashion writer He Yi,
it is time to tighten their purse strings, Wednesday's China Daily reported.
He said she is determined to use less
air-conditioning when driving, despite the scorching heat in Beijing.
According to a survey by the Chinese web portal
Sina.com, more than 90 percent of the 180,000 respondents said they had decided
to drive less in response to the price hike, and more than 94 percent thought
fuel prices are too high now.
Pump prices for 90 octane gasoline in Beijing was set
at roughly 5.71 yuan a liter, or about 3.16 U.S. dollars a gallon, the National
Development and Reform Commission, the nation's top economic planning agency,
said in a statement on its website late Monday.
That compares to an average of 2.69 U.S. dollars a
gallon in the United States, according to Bloomberg.
China's retail fuel prices are controlled by the
government under a mechanism introduced in December that takes into account of
crude prices, taxes and a profit margin for refiners.
The country may adjust fuel prices when crude prices
change more than 4 percent over 22 straight working days. Crude oil futures have
risen 60 percent to more than 70 dollars a barrel this year from a July record
on signs of a global recovery.
However, economists and analysts believe this round
of price hike will not have any direct and obvious impact on the Chinese
economy, which is largely fueled by coal.
"As China only needs oil to supply 20 percent of its
energy consumption, costlier oil will not make things as bad as costlier coal,"
said Lin Boqiang, director of the China Center for Energy Economics Research at
Xiamen University.
"However, the economy will be hurt if higher crude
prices drive up coal prices," Lin said.
In addition, China's consumer prices fell for a
fourth month in May, making it easier for the government to raise oil prices,
said Niu Li, senior researcher at the State Information Center.
The price hike comes amid a surge in demand for
automobiles in the world's third-largest economy. Passenger car sales rose 47
percent in May to 829,100 units, the biggest jump since February 2006.
Chen Zheng, an auto industry analyst with China
Securities Co, believed that consumer demand would not be seriously dampened by
this round of price hikes, as China's car owners are largely social elites, who
can afford the moderate increases in gasoline prices.
"But if oil prices continue to surge, I'm sure many
people will stop buying new vehicles, especially the high-emission cars," Chen
said.
PetroChina and Sinopec, two major oil producers, went
high shortly after opening, but closed with smaller gains, up 0.28 percent and
0.66 percent to 14.48 yuan and 10.66 yuan respectively in Shanghai Tuesday.