Beijing raises fuel prices 6-7%

The National Reform and Development Commission (NDRC) said Sunday it plans to raise domestic gasoline and diesel prices by US$58 per metric ton, an increase of 6-7%, the Wall Street Journal  reported. The price change, which will take effect today, was made due to rising crude oil prices, the NDRC said on its website. Crude oil futures hit a six-month high last Friday as investors looked to a resurgence in global demand. The price hikes in China are part of a wider strategy to reform the country’s fuel pricing system by gradually unwinding the stringent caps imposed on the prices of retail fuel products. As a result of the caps, domestic refiners have suffered from squeezed profit margins because they are unable to pass on the higher cost of crude oil globally to consumers. The announcement follows the end of the spring planting season, during which diesel consumption usually peaks in rural areas.