China's top economic planner says the country is studying a new fuel pricing scheme to make it reflect the global markets' oil price fluctuations more swiftly.
Zhang Ping, the head of the National Development and Reform Commission or NDRC, says the current pricing scheme has 2 major defects, which are the untimely 22-working-day cycle and the 4-percent fluctuation range.
This means fuel prices on the Chinese Mainland are adjusted when crude oil prices change by more than 4 percent over a 22 working day period.
Zhang says the current mechanism fails to timely reflect the volatility in global oil prices.
The most recent oil price hike fell on the Lantern Festival and went against the downward trend of crude oil prices.
Zhang says the plan to reform the current pricing mechanism will shorten the 22-working-day cycle and remove the 4-percent fluctuation limit.
Zhou Dadi, a researcher with NDRC, says they're now considering more than just international crude oil prices.
"We formed our price based on the international crude oil price; however, other elements are also put into consideration such as cost of domestic oil refining, transportation and marketing. Meanwhile, we also left a room for taxes and a reasonable profit for oil firms."
