China May Raise Fuel Prices for First Time in Six Months on OilBloomberg News
Nation may increase gasoline, diesel prices on April 26: ICIS
China froze fuel-price adjustments below $40 a barrel
China may increase local fuel prices for the first time in six months following a rally in oil prices.
The nation may raise gasoline and diesel retail rates by 175 yuan ($27) a metric ton on April 26, ICIS China, a Shanghai-based commodity researcher, said in an e-mailed report. Brent oil, the international benchmark, has surged more than 60 percent from a 12-year low in January. China last increased fuel prices in October.
The Chinese government decided in January not to adjust fuel prices when oil falls below $40 a barrel to support oil companies and curb pollution. The policy resulted in refining margin for Chinese plants increasing 68 percent to $16 in the first quarter of this year from the previous 12 months, according to ICIS China. Exports slipped in the first two months as it became profitable to sell oil products at home.
“If oil can stay above $40 a barrel, China will return to its normal fuel-adjustment cycles, which is every 10 working days,” Lin Jiaxin, an analyst with ICIS China, said by phone from Guangzhou. “Refiners’ processing margins will probably fall from the first quarter’s high.”
China’s diesel exports surged to a record 1.25 million tons in March as the oil rally boosted overseas fuel prices. Once China resumes raising prices, domestic and international rates will equalize and refiners’ exports will be driven by their stockpile levels, Lin said.
— With assistance by Jing Yang