Gaso­line, diesel prices rise

In­crease brought on by moves by OPEC and 11 coun­tries to cut crude out­put within six months

China Daily (Hong Kong) - - BUSINESS - By YANG ZIMAN yangz­i­man@chi­

China saw its big­gest gaso­line and diesel price in­crease in the past four years late last night, driven up by the out­put cut by OPEC and other pro­duc­ers.

Gaso­line and diesel prices were hiked by 435 yuan ($63) and 420 yuan per met­ric ton, re­spec­tively, ac­cord­ing to an an­nounce­ment by the Na­tional De­vel­op­ment and Re­form Com­mis­sion on Wed­nes­day. It was the 24th price ad­just­ment for this year.

The na­tional av­er­age re­tail prices rose by 0.32 yuan (for 90-oc­tane gaso­line) and 0.36 yuan (for diesel) per liter. The prices have been fluc­tu­at­ing around 5 yuan per liter since the be­gin­ning of this year. For a car with a 50-liter fuel tank, it will cost an­other 16-20 yuan to get a full tank.

This is the ninth fuel price hike in China so far this year.

Last week, OPEC and 11 non-OPEC coun­tries, in­clud­ing Rus­sia, agreed to cut 1.8 mil­lion bar­rels of crude oil out­put per day within six months, start­ing from Jan­uary next year.

The out­put curb has pushed up in­ter­na­tional oil prices. As of Tues­day, the WTI crude price in­creased by $1.33 per bar­rel to $52.83 per bar­rel, com­pared with Nov 30 when OPEC an­nounced the out­put cut. The price of Brent crude in­creased by $1.36 per bar­rel to $55.69 per bar­rel. Both have reached the high­est level so far this year.

Li Li, an an­a­lyst with ICIS China, said that global oil prices are un­likely to sur­pass $60 per bar­rel in the short run.

mil­lion bpd

“In­ter­na­tional oil prices are ex­pected to fluc­tu­ate be­tween $55 and $60 per bar­rel. Out­put in China is not ex­pected to in­crease much be­cause the ca­pac­ity that has been shut down is mostly out­dated and of small fa­cil­i­ties. The gen­eral ex­pec­ta­tion is that oil prices are not go­ing to surge. The ef­fect on the con­sumer price in­dex is also limited,” said Li.

The last ma­jor price hike was in Oc­to­ber, with an in­crease of 340 yuan and 355 yuan per ton for gaso­line and diesel, also driven by the out­put lim­i­ta­tion an­nounced by OPEC at the end of Septem­ber.

“OPEC has achieved its goal of an oil price hike by shed­ding some mar­ket share. This has also cre­ated good op­por­tu­ni­ties for the US oil in­dus­try to re­cover. More­over, Rex Tiller­son, the chief ex­ec­u­tive of­fi­cer of ExxonMo­bil Corp, has just been ap­pointed as the next US sec­re­tary of state, which will in­ject more im­pe­tus for the coun­try’s oil in­dus­try,” said Li.

Zou Yanan, an an­a­lyst with SCI In­ter­na­tional, said that re­tail­ers in cen­tral, south­west­ern and north­west­ern parts of China have been lim­it­ing sales due to tight sup­ply of gaso­line and diesel.

the amount of crude out­put to be cut in six months from Jan­uary by OPEC and 11 coun­tries


A worker helps re­fuel a car at a gas sta­tion in Nan­jing, Jiangsu prov­ince, on Wed­nes­day.

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