Due to the impact of the Middle East war, international oil prices have surged. On the 23rd, China’s National Development and Reform Commission (NDRC) announced that, in order to ensure stable economic operations and social wellbeing, temporary regulatory measures would be taken for domestic refined oil prices. Starting from midnight on the same day, the regulated price increase for gasoline and diesel (standard grade) will be 1,160 yuan (662 Ringgit) and 1,115 yuan (637 Ringgit) per ton respectively, with the increase reduced by nearly half.
According to Xinhua News Agency, the NDRC stated that since the last adjustment of domestic refined oil prices on March 9, international crude oil prices have risen dramatically due to the intensification of the US-Iran war. In order to mitigate the impact of the abnormal surge in international oil prices, lessen the burden on downstream users, and ensure stable economic operations and social wellbeing, temporary regulatory measures on domestic refined oil prices are being adopted, based on maintaining the current pricing mechanism.
The NDRC noted that, according to the current pricing mechanism, beginning from midnight on the 23rd, the domestic gasoline and diesel prices (standard grade) should be increased by 2,205 yuan (1,259 Ringgit) and 2,120 yuan (1,211 Ringgit) per ton respectively, but after regulation, the actual increase will be 1,160 yuan and 1,115 yuan.
Reports indicate that in recent years, China’s refined oil prices have always been adjusted according to the current mechanism. This is the first time regulatory measures have been adopted since the current mechanism was implemented in 2013. Relevant experts analyze that this move by the Chinese government is a prompt and effective response to sharply rising international oil prices, and that it plays an important role in ensuring stable domestic economic operations.
An official from the National Development and Reform Commission indicated that they are guiding oil production and sales enterprises to organize production and distribution of refined oil with full effort to ensure market supply, and will cooperate with relevant departments to strengthen market supervision and inspection, strictly investigate and punish violations such as non-compliance with national pricing policies, effectively maintain market order, and protect consumer interests.
This oil price increase is the fifth so far this year. Although the Chinese authorities have stepped in to regulate, it still remains the largest increase to date this year.