China may tweak oil price-setting formula

China is considering a new method for setting domestic oil product prices that could lead to more frequent adjustments aimed at easing the sort of shortages that have hit the south of the country, a newspaper reported on Saturday.

China has raised retail prices of diesel and gasoline three times this year, but the increases have fallen far short of the spike in global prices.

This has made it difficult for China’s refiners to turn a profit and has encouraged them to boost exports at the expense of domestic sales. The result has been widespread shortages recently in the south, with drivers queueing for hours for petrol.

To tackle the problem, top planners at the energy policy-setting National Development and Reform Commission (NDRC) called in oil firm executives on Aug. 13 to discuss the future of its pricing system.

China Daily