China intervened to cushion rising fuel prices on Monday, increasing regulated ceiling prices for retail gasoline and diesel but limiting the hike to about half what would normally be applied under the government's pricing mechanism.
However, the adjustments brought on by rising oil prices linked to the US-Israeli war on Iran were still the largest on record, lifting price limits close to levels seen in 2022 following Russia's invasion of Ukraine.
The state planner, the National Development and Reform Commission, said on Monday it would raise the maximum retail prices for gasoline and diesel by 1,160 yuan ($167.93) per metric ton and 1,115 yuan per metric ton, respectively, starting from Monday midnight, Reuters reported.
The NDRC reviews retail gasoline and diesel prices every 10 working days and applies adjustments reflecting changes in international crude oil prices, while taking into account average processing costs, taxes, distribution expenses, and appropriate profit margins.
Under the current pricing mechanism, gasoline and diesel prices would have been set to rise by 2,205 yuan per metric ton, and 2,120 yuan per metric ton, respectively, according to NDRC.
"To cushion the impact, ease the burden on downstream users, and support economic and social stability, authorities introduced temporary controls within the existing pricing framework," the state's planner said in an announcement.
Oil prices rose on Monday after Iran's Revolutionary Guards said they would target Israel's power plants and those supplying US bases in the Middle East in retaliation against any attack on its electricity sector.
Brent crude futures were up $1.57 to $113.76 a barrel by 0731 GMT. US West Texas Intermediate was at $101.32 a barrel, up $3.09, or 3.15%.
