Petrol will cost 0.8 yuan (12 cents) and diesel 0.92 yuan more for a liter from today, and electricity charges for commercial units will go up by 0.025 yuan ($0.4 cents) per kWh from July 1.
. _. [* J! }8 r* i7 c/ v" c; v The price of aviation fuel has been raised, too, by 1500 yuan ($217) a ton, said the National Development and Reform Commission (NDRC).# r! C+ \! S- z M. f+ B( _- {8 \
The government was forced to raise oil prices from midnight last night, the first time in eight months, because of the soaring price of crude in the international market.* N$ ]! q+ w$ O/ v& K: S
The move is expected to bring some relief to domestic refineries, which have been reeling under losses, and ensure a stable supply of oil in the market. "The increase in the prices will benefit domestic oil companies," the NDRC said in a statement yesterday.
3 l/ O4 j& p, H% r4 z8 I The price of crude oil in the international market has crossed $130 a barrel. Crude price is linked fully with the international market in China, while prices of refined petroleum products are still controlled by the government.' _6 k/ b1 G3 c9 ^! u* T
Because of the big gap between the high crude price abroad and the relatively low price at home, China's oil refineries have suffered huge losses.4 K# M+ c* |4 h' z5 c# B, R
The country's largest refinery, Sinopec, incurred a loss of more than 20 billion yuan in its refining business in the first quarter of this year.
' o" G% _8 Z: m* A; J) ] The largest oil company, PetroChina, saw its net profit fall by more than 30 percent in the first three months, with losses in its refining wing being the biggest contributor.
0 k1 j- R* r! Q Analysts said the high consumer price index (CPI) in recent months had been a deterrent for an increase in oil prices.+ v5 H6 y g/ y; o' c; w0 ?
The country's CPI, the main gauge of inflation, rose 8.5 percent year-on-year in April. It was 8.3 percent in March and a nearly a 12-year-high of 8.7 percent in February.+ W ~. {9 U5 U: W
It, however, dropped to 7.7 percent in May, paving the way for the government to increase oil prices, an analyst said.
1 T2 A* Z; o. x7 E! m. _- O) { But increased oil prices could push up the rate of inflation, Zhou Dadi, vice-director of China Energy Research Society said.
4 |' X8 o" z! Y+ s( s! K- \$ v7 a Electricity charges* I: m# h, v* Q) ]% l& z M
The government will raise the electricity tariff to prevent power companies from incurring further losses.
# b( r) Q. `* h0 p2 ?3 Q/ w; {# @$ _& \ The price of coal will be brought under government control temporarily, the NDRC said, because soaring coal price is the main factor behind higher electricity charges.
/ Q; V8 M) H6 R) w& R( j The increase in power tariff will help the development of desulfurization equipment in the power plants, and renewable energy sources such as wind power and biomass power, the NDRC said.' x ~" k9 k6 u0 C! ?
The increase in power tariff will not create a big impact on the CPI because urban and rural residents have been exempted. |