China sets rise in retail fuel prices

BEIJING/SINGAPORE – China will raise retail diesel and gasoline prices for the first time in eight months this weekend, but the 3-5 percent increase will leave refiners in the red and do little to deter fuel demand.

The modest rise, reflecting Beijing’s continued caution over reform, may send shares in listed refiners lower next week but should leave an expected rebound in oil demand from the world’s second-biggest consumer on track this year.

The price of retail gasoline will increase by 250 yuan ($31) per tonne and diesel will rise by 150 yuan, an industry official in China said. They are the first rises since July 23, but well below most expectations after weeks of feverish rumors.

“We got the notice around lunchtime,” the official told Reuters. The National Development and Reform Commission, China’s powerful economic policy body, strictly controls fuel prices and normally notifies refiners of changes a day in advance.

Reuters