China May Postpone Fuel Price Increases on Inflation, CICC Says
China, the world’s fastest-growing major economy, may delay increases in fuel prices because of inflation concerns, the nation’s largest investment bank said.
Adjustments may be postponed even after crude prices have risen 5 percent since the last fuel-price adjustment in October, Bin Guan, an analyst at China International Capital Corp., wrote in an e-mailed note dated yesterday.
China adjusts gasoline and diesel prices when crude costs change more than 4 percent over 22 working days under a mechanism introduced in December 2008. Consumer prices gained 4.4 percent in October, the fastest pace in two years, because of higher food costs.
Chinese refineries will lose $3 for every barrel of oil processed by the year-end if global crude prices remain at current levels, Guan said.
U.S. crude reached $90.76 a barrel yesterday, the highest in 26 months. Oil in New York was at $88.06 a barrel as of 3:44 p.m. Singapore time.
Gasoline and diesel wholesale prices fell 2 percent last week from a week earlier as China’s diesel supply shortage eased, according to the report.
China Petroleum & Chemical Corp. and PetroChina Co., the nation’s biggest refiners, have run their plants at full capacity and ramped up imports of diesel after a shortage depleted at least 2,000 retail fuel stations.
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