Nov. 10 (Bloomberg) -- China, the world’s second-largest energy user, raised gasoline, diesel and jet fuel prices for the first time in more than two months as crude costs climbed.

Pump prices for 90 octane gasoline will be set at a maximum of 5.98 yuan (88 cents) a liter, or about 22.6 yuan a gallon, in Beijing, National Development and Reform Commission, China’s top economic planner, said on its Web site yesterday. The price increases of as much as 8 percent boosted shares of China Petroleum & Chemical Corp. and PetroChina Co., the nation’s two largest refiners.

The adjustment will be China’s fifth under a system introduced in December that keeps oil-product prices in line with global crude costs and ensures refiners a profit. The Chinese government is raising prices as the economy expands at the fastest pace in a year, spurring fuel consumption, and the international price of crude oil climbs.

“If oil prices hover around current levels of $78 to $80 during the remainder of the year, we estimate Beijing will need to raise prices by another 5 to 8 percent on Dec. 11 to ensure that refiners will enjoy $7 to $8 a barrel of gross margin,” said Gordon Kwan, the head of energy research at Mirae Asset Securities, in a note. The price gain was in line with his expectation for an 8 to 10 percent increase at the pumps.

Inflation Boost

China controls fuel prices to keep inflation in check. Under the new pricing mechanism, the government may adjust prices when crude-oil costs change more than 4 percent over 22 working days, the reform commission said in May. China has revised prices eight times since December, including today’s move, compared with two adjustments in 2008. In dollar terms, the increase will take the pump price of gasoline to about $3.31 a gallon in China, compared with $2.68 in the U.S.

The fuel price increase will lift November’s consumer price index reading by 0.12 percentage point, the commission said. Still, it doesn’t pose an inflationary risk, it said.

“I was looking for inflation to return in November. That will make the return of inflation all the more quicker,” said Ben Simpfendorfer, chief China economist with Royal Bank of Scotland Group Plc in Hong Kong.

Fuel Surcharges

China’s airlines will resume fuel surcharges on domestic flights after the price increase, the commission said. Taxi drivers will be able to charge higher fare rates or add fuel surcharges to pass on the higher costs, it added.

The relaxation of price curbs helped China Petroleum & Chemical Corp., or Sinopec, post a record profit in the second quarter. Third-quarter profit for Sinopec slipped 25 percent from the previous quarter as state-set price increases lagged behind gains in crude costs.

Sinopec and other Chinese oil stocks rose in Hong Kong trading today. Sinopec gained as much as 2.6 percent and PetroChina Co. climbed as much as 2.8 percent.

The prices of gasoline and diesel will have risen by about 27 percent this year after the increase, while crude has doubled, the commission said.

Crude oil for December delivery traded at $79.03 a barrel, down 40 cents, in electronic trading on the New York Mercantile Exchange at 9:46 a.m. Singapore time. Prices have gained 77 percent since the start of the year.

Refining Margins

Sinopec’s refining margins fell to $5.20 a barrel in the three months to September from $9.20 in the second quarter and the company’s refining business incurred losses in September and October, Chief Financial Officer Wang Xinhua said on Oct. 30.

The gasoline price charged by refiners will be raised 7 percent to 7,100 yuan a ton, starting today and the diesel price will gain 8 percent to 6,360 yuan a ton, the commission said. Jet fuel prices will rise by about 7 percent to 5,190 yuan a ton.

“The fuel price adjustment will encourage refineries to boost production and guarantee domestic supply,” the commission said in the statement. “It will also help energy conservation and reduce emissions.”

The increases will boost costs for manufacturers, farmers and airlines. Still, rising corporate profits and a recovering economy will help consumers cope with higher fuel prices. The world’s third-biggest economy may expand at a 9.5 percent annual pace this quarter, according to Zhang Liqun, a senior researcher at the State Council Development and Research Center.

To contact the reporters on this story: Ying Wang in Beijing at ywang30@bloomberg.net; Baizhen Chua in Beijing at bchua14@bloomberg.net;

Last Updated: November 9, 2009 21:21 EST