Watch­dog to launch new fuel price ad­just­ment sys­tem

China Daily (Canada) - - TOP NEWS - ByWANG YANFEI and ZHENG YANGPENG

China’s top pric­ing reg­u­la­tor is to in­tro­duce a more flex­i­ble method for pric­ing do­mes­tic fuel, with ad­just­ments al­lowed if the in­ter­na­tional oil price fluc­tu­ates be­tween $40 and $140 per bar­rel.

Thep­ricin­gofliq­ue­fied­petroleum gas will be solely mar­ket­based, ac­cord­ing to a state­ment re­leased by the Na­tional De­vel­op­ment and Re­form Com­mis­sion on Wed­nes­day. Un­der the new pric­ing sys­tem, the com­mis­sion has low­ered do­mes­tic gaso­lin­e­and­diesel pricesby140 yuan ($21) and 135 yuan a bar­rel, re­spec­tively, start­ing from Thurs­day. Th­ese cuts are equiv­a­lent to a 0.1 yuan re­duc­tion for stan­dard gaso­line and 0.11 yuan for stan­dard diesel.

Lin Bo­qiang, di­rec­tor of the China Cen­ter for En­ergy Eco­nom­ics Re­search at Xi­a­men Univer­sity, said, “Mar­ket-based pric­ing of liq­ue­fied pe­tro­leum gas is a good star­ing point.

“With suf­fi­cient sup­ply and in­creased pro­duc­tion ca­pac­ity of do­mes­tic en­ter­prises, the govern­ment will be able to see how this is im­ple­mented and fur­ther ex­tend the pric­ing sys­tems to other ar­eas,” Lin said.

The com­mis­sion said that while China may not lower fuel prices­fur­theramidglob­al­falls— with­oilplung­ing­toa12-year­low ofabout$30abar­rel— the­main con­cernispro­tect­ingth­en­ation’s en­ergy se­cu­rity and pro­mot­ing the use of re­source con­ser­va­tion and new-en­ergy de­vel­op­ment to com­bat­air pol­lu­tion.

“A fuel price that is too low would deepen the level of China’s de­pen­dence on the ex­ter­nal oil mar­ket, which has al­readyreached60per­cent. It is also detri­men­tal to air qual­ity and the shift to­ward in­creased use ofnewen­ergy,” thecom­mis­sion’s state­ment said. Liao Na, vice-pres­i­dent of in­de­pen­dent en­ergy con­sul­tancy ICIS C1, said, “The new price ad­just­ment range pro­vides do­mes­tic pro­duc­ers with op­por­tu­ni­ties to bet­ter know the ap­pro­pri­ate pric­ing range be­fore a com­pletely mar­ket-based sys­tem.”

Xu Shaoshi, head of the com­mis­sion, said in an ar­ti­cle pub­lished in Study Times on Jan 4 that China will see com­plete mar­ket-based oil pric­ing by the end of the 13th FiveYear Plan (2016-20).

Con­tact the writ­ers at wangyan­fei@chi­nadaily.

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