Feb. 24, 2012
Translated by Ma Zheng

According to an article in today's Securities Daily, China's domestic fuel prices are unlikely to be raised until the annual meeting of the country's top political bodies concludes in mid-March.

Rising international tensions surrounding Iran have helped to push international crude oil prices up since early February.

Given this increase in international crude prices, many analysts are predicting that the National Development and Reform Commission (NDRC), China's top economic policy planning body, will move to lift prices according to an existing mechanism that links domestic prices according to changes in the international market.

According to the current system, the next window for the NDRC to lift the ceiling for refined oil prices will open on March 8, which coincides with the holding of what is often referred to in Chinese as the "two sessions."

The report says that authorities are likely to delay the adjustment until after the political meetings have concluded.

The meetings of the National People's Congress (NPC) and the China People's Political Consultative Conference (CPPCC) are scheduled to begin on March 5 and March 3 respectively.

The NDRC normally considers adjusting fuel prices if the 22-day moving average of international crude oil prices rises or falls by more than 4 percent, though this mechanism is currently under review and a new method for calculating changes to fuel prices is expected to be released soon.

China last raised the retail prices of fuel and diesel by 3 to 4 percent, or about $1 per liter, in early Feb this year, the first hike in 10 months.

The report also quoted "industry insiders" pushing for the launch of crude oil futures as soon as possible, arguing that this would help China gain more power in controlling prices.

Links and Sources
Securities Daily: 国际油价连涨 成品油调价或延至"两会"后