By staff reporter Yang Yue

(Caijing.com.cn) China has raised gasoline and diesel prices by around 9 percent effective June 30 to reflect rising crude oil prices on the international market.

Gasoline and diesel prices will be increased by 600 yuan per ton, or 0.4 yuan to 0.5 yuan per liter, the National Development and Reform Commission said in a June 29 statement on its website.

It was the second hike this month after the NDRC moved to raise gasoline and diesel prices by 6.13 percent and 6.9 percent respectively on June 1.

Gasoline will cost 6,730 yuan per ton and diesel 5,990 per ton following the latest price rise.

(CFP)

"It seems an unexpectedly large increase in fuel prices given the current economic situation," said Han Xiaoping, an analyst with Chine 5e, a Beijing-based energy consulting firm.

Under a market-based pricing scheme implemented in January, the government can choose to adjust oil prices if international crude prices fluctuate more than 4 percent over 22 successive working days.

The reformed pricing mechanism aims to ensure domestic prices more closely reflect changes in the global market, allowing refiners to make an "appropriate" profit.

Crude oil prices have risen 19.4 percent since prices were last adjusted on June 1, according to Shanghai-based energy information firm CBI.

The domestic economy is still recovering and demand for oil products remains relatively weak. In this context, the price adjustment indicates that the government is more closely following the new fuel pricing formula where previously it had exercised discretion in hiking prices, an analyst with CBI said.

In early May, the state planner rejected a request from China National Petroleum Corp. and Sinopec to raise prices by 10 percent. On June 1, when the NDRC did eventually move to change prices, the commission said it intentionally limited the scope of the price increase given the relatively weak state of China's economy.  

At 10:41 am, PetroChina was trading at 14.61 yuan, up 1.18 percent, while Sinopec was up 2.36 percent at 10.84 yuan.

1 yuan = 14 U.S.cents

Full article in Chinese: http://www.caijing.com.cn/2009-06-30/110190921.html