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.
2 j) z) q% M G% C1 ?3 K& j The price of aviation fuel has been raised, too, by 1500 yuan ($217) a ton, said the National Development and Reform Commission (NDRC).
# ~& f1 v. U0 B; C7 C7 p+ P( C' _ 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./ S4 ^( B# h4 c
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.
9 C7 T; T3 i7 L The price of crude oil in the international market has crossed $130 a barrel. Crude price is linked fully with the international market in China, while prices of refined petroleum products are still controlled by the government.: d& p( q. N3 }8 V) U, i
Because of the big gap between the high crude price abroad and the relatively low price at home, China's oil refineries have suffered huge losses.5 W% ^0 U: c) d( [* G8 f
The country's largest refinery, Sinopec, incurred a loss of more than 20 billion yuan in its refining business in the first quarter of this year.
8 ^: Y. N0 g3 C) Y1 O9 v9 N- g The largest oil company, PetroChina, saw its net profit fall by more than 30 percent in the first three months, with losses in its refining wing being the biggest contributor.
3 t$ k. F0 F2 A+ n( H8 y Analysts said the high consumer price index (CPI) in recent months had been a deterrent for an increase in oil prices.
; F) k$ ] C) F, d2 ]$ m 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.' w9 b' l" X. J- d4 b" J( Y2 R* h. X
It, however, dropped to 7.7 percent in May, paving the way for the government to increase oil prices, an analyst said.
" T" |+ @: r+ n4 E9 v5 k* x; x/ l But increased oil prices could push up the rate of inflation, Zhou Dadi, vice-director of China Energy Research Society said.
C& F B0 j9 q Electricity charges
$ I4 p; r& `; G, v! b- e The government will raise the electricity tariff to prevent power companies from incurring further losses.# k. O- ^6 B, t: { i$ O' M
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.2 l0 t7 J2 @7 k1 P5 L
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.1 h [1 r- T: o# Z. K5 \( C5 X
The increase in power tariff will not create a big impact on the CPI because urban and rural residents have been exempted. |