BEIJING, Sept. 2 -- China is to raise the prices of gasoline and diesel by 300 yuan (44.12 U.S. dollars) a tonne, or about 4 percent each Sept. 2, the country's top economic planning agency said late Tuesday.
The retail price of gasoline will increase by 0.22 yuan a liter, and diesel will increase by 0.26 yuan a liter, said the National Development and Reform Commission (NDRC).
The benchmark price of gasoline will be 6,810 yuan a tonne, and for diesel 6,070 yuan a tonne.
Jet fuel prices will rise to 7,010 yuan a tonne, up 4.6 percent.
The price hike is in accordance with international price changes, said the NDRC.
It is the seventh fuel price adjustment since China adopted a new fuel pricing mechanism on Jan. 1.
Under the mechanism, the NDRC will consider changing benchmark oil product prices when the international crude price rises or falls by a daily average of 4 percent over 20 days.
On Tuesday, the benchmark crude for October delivery was up 18cents before settling at 70.14 U.S. dollars a barrel on the New York Mercantile Exchange. Brent crude was up 22 cents at 69.87 U.S. dollars.
The NDRC is basing its adjustment of domestic fuel prices on three variations of global crude prices, but did not reveal their structure.
Since we cut the domestic fuel prices on July 29, global crude prices have gone up more than 4 percent, which demands a hefty price rise, said Xu Kunlin, deputy head of the pricing department under the NDRC.
However, considering the market conditions and the fact that the economy is on road to recovery, the government decided to keep the price rise at a "moderate" rate, he said.
Wang Jing, analyst with the Oriental Securities, said the global crude prices have climbed by more than 10 percent over the last 22 trading days, and a domestic price rise of 300 yuan per tonne is within the market's acceptance.
Xu Kunlin said the price hike could also be a blessing for the nation's refiners.
On Monday, Sinopec tumbled by 10 percent, or its daily limit, to 11.13 yuan as investors disappointed that the domestic fuel prices were not adjusted as they expected in order to prevent bigger losses for the company's refining business.
Wang Jing said although the price change is a little bit later than expected, the price adjustment mechanism is working normally. As the market-based mechanism is improving, such adjustment will be regular.