The refined oil prices in China have gone up sharply today with gasoline price rising by 0.4 yuan per liter and diesel prices skyrocketing 0.5 yuan per liter.
Gas prices here in China have already been on the rise in recent days, with most retailers expecting the move, leaving many drivers frustrated.
"The National Development and Reform Commission reacts slowly at a time when the international oil prices lower. But it reacts so swiftly to the rise of the international oil prices."
The National Development and Reform Commission says raising the price of fuel because international crude prices have risen by more than 10-percent since the end of last month.
China's central planning department can adjust retail fuel prices when international crude oil prices change by more than 4 percent over 22 consecutive working days.
Wang Zhen, a researcher from China University of Petroleum says oil price hikes will lead to a rising expenditure in energy consumption and also a soaring cost of raw materials in manufacturing industry. He called for more subsidies from the government.
"The government should offer subsidies for agriculture, forestry and fishery which have fairly large consumption of oil. More diesel will be consumed for the farming machine in the upcoming ploughing season. So we need to subsidize farmers so as to make sure ease the impact of oil price hikes on farming."
Other sectors that would be subsidized include manufacturing, public transportation and fishing industry.
Some government departments have made proposals to revise China's oil pricing system. But Wang Zhen thinks it is the domestic market that can finally decide the oil price rather than by executing administrative power.
"The new proposal indicates the retail fuel prices can be adjusted when international crude oil prices change by more than 4 percent over 11 consecutive working days, which is cut half from the current period. But I think it is just a transitional plan to shorten price change period and increase price change frequency. In the long-term, it is crucial to beef up market reform so that market demand can have the last say in oil price."
The Chinese government last raised fuel prices in February. Since then, international oil prices have been skyrocketing due to the volatility in the Middle East.
For CRI, I am Wei Tong.
