China's National Development and Reform Commission has raised domestic retail prices of gasoline and diesel by Yuan 165/mt ($26.50/mt) and Yuan 160/mt, respectively, effective midnight Tuesday.
This is the first fuel price adjustment in a month. Retail prices for both fuels were last raised by 70/mt on May 23.
The benchmark retail price of gasoline in Beijing is now Yuan 9,940/mt, up from Yuan 9,775/mt previously, representing a 1.7% increase.
The retail diesel price in the capital has risen by 1.8% to Yuan 9,175/mt.
The central government sets benchmark retail prices for both oil products for each region.
Under the oil product pricing mechanism, regulated prices are automatically adjusted every 10 working days in line with international crude price fluctuations, unless the resulting price change is less than Yuan 50/mt, roughly equivalent to $1/barrel. If this occurs, the adjustment is rolled over and included in the next price change.
The current system is intended to help refiners cut the losses incurred by the government's cap on oil product prices, which were exacerbated when the government previously reviewed prices every 22 days and at times, refused to adjust prices due to inflationary concerns.
The 10-day moving average prices of Platts Dated Brent, Russian ESPO and Middle Eastern Dubai and Oman crudes -- the benchmark grades to which a large proportion of China's crude imports are pegged -- as of last Friday were about 2.1% higher than on May 23.
