China caps petrol price increases amid soaring crude oil expenses

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China has limited the amount by which the country’s fuel costs can rise, the government announced Monday, to mitigate surging oil prices due to the Middle East war.

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Global oil prices have soared as the war between the United States, Israel and Iran has centred around the Strait of Hormuz, through which around 20 percent of the world’s oil and gas shipments normally transit.

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“To mitigate the impact of abnormal increases in international oil prices, ease the burden on downstream users, and ensure stable economic operations and public welfare, temporary regulatory measures have been adopted,” China’s state planner said in a statement.

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The National Development and Reform Commission (NDRC) said it will hike the maximum retail prices for gasoline and diesel by 1,160 yuan ($168) and 1,115 yuan per metric tonne respectively, starting from midnight.

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The increase is around half of what it would have been under the government’s pricing mechanism, which would have seen gasoline and diesel prices raised by 2,205 yuan and 2,120 yuan per metric tonne respectively, it added.

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The NDRC routinely reviews gasoline and diesel prices and makes adjustments based on factors such as global crude prices.

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In its last hike in March, the NDRC raised maximum retail prices for gasoline and diesel by 695 yuan and 670 yuan per metric tonne respectively.

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AFP

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