China Fuel Prices Hit Trigger Point for Rise
OREANDA-NEWS. February 26, 2013. China, the world's second-largest oil consumer, could consider raising the prices of gasoline and diesel as early as this month as a basket of crude oil prices has risen to hit a trigger point, data from an energy consultancy showed.
The 22-day moving average price of Brent, Dubai and Cinta on Feb. 15 was 4.3 per cent above the level when China last adjusted fuel prices, the data from C1 Energy showed.
An increase or fall in crude benchmarks by more than 4 per cent over a 22-working-day period typically triggers a price rise or cut under China's current pricing regime.
However, the government often postpones rises if it is worried about inflationary pressures, and this time may only consider a rise later this month because current fuel demand remains high as hundreds of millions of people are travelling back to their workplaces after the Lunar New Year holiday.
China last adjusted fuel prices on Nov. 16, when it cut them by about 3 per cent in response to a decline in crude oil prices.
It has been considering a revamp of the current pricing scheme to better reflect refining costs, with plans to lower the trigger point, shorten the adjustment period and change the composition of the basket of crudes to which pump prices are linked.
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