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| China-Japan-Koreas |
| China Hikes Fuel Prices Amid Shortages |
| 2007-11-01 |
| China raised gasoline and diesel prices Thursday by about 10 percent to curb demand amid shortages that have caused long lines at filling stations and disrupted trucking in key export areas. Oil companies have blamed the shortages, which began last week, on a lack of refining capacity. Consumers and some Chinese media have accused suppliers of creating a phony crisis to force Beijing to raise prices. Thursday's price increases are meant to narrow the gap with soaring crude costs, according to the National Development and Reform Commission, the country's main planning agency. It was the government's first fuel price hike in 18 months. The NDRC statement said prices would rise by 9.1 percent for gasoline and 9.9 percent for diesel, but said prices at some retailers could be up to 8 percent more than that. Trucking companies say diesel rationing has slowed deliveries in Shanghai and areas along China's southeast coast that export manufactured goods to the United States and other foreign markets. A man was killed in a fight Wednesday after he tried to cut in line for gas in the central province of Henan, police said. Thursday's price increase marked the reversal of a September government order that froze prices of gasoline and other basic consumer goods to rein in rising inflation. The commission said it would try to shield the public from some of the increases. "Prices of railway tickets, natural gas for civilian use and public transportation will not be raised to reduce the impact of the price hikes on the public, and the government will provide subsidies for taxi drivers," the commission said. Some refineries have stopped processing to avoid losses. It was unclear whether the price increase would be big enough to make refiners profitable and open to increasing production. After Thursday's increase, Chinese motorists will pay about $3.20 per gallon for gasoline. Diesel prices rose to about $2.69 a gallon. Inflation hit an 11-year monthly high of 6.5 percent in August. It eased to 6.2 percent in September but the full-year rate is expected to be well above the official target of 3 percent. |
| Posted by:Nimble Spemble |