China Reduces Fuel Price Increases Amid Soaring Global Energy Costs

Tue Mar 24 2026 08:10:51 GMT+0000 (Coordinated Universal Time)

In response to rising energy costs, China has cut the planned increase in fuel prices to lessen the economic burden on drivers as prices soar due to the ongoing Iran war.

China has decided to reduce planned fuel price hikes in an effort to alleviate the financial burden on its drivers amidst rising energy costs resulting from the ongoing conflict in Iran. The initial hikes were set to significantly increase prices, but government adjustments will halve the increases starting Tuesday. As fuel prices surge globally, other Asian nations are also implementing measures to mitigate the impact on consumers.

China has dialled back on planned fuel price hikes in a bid to 'reduce the burden' on drivers, as energy costs surge amid the Iran war.

The local price of petrol has jumped by about 20% since the start of the conflict, which has seen Iran effectively close one of the world's busiest oil shipping channels, the Strait of Hormuz.

Gasoline and diesel prices were initially set to rise by 2,205 yuan (£239; $320) and 2,120 yuan per tonne respectively – but after government adjustments, the increases will be nearly halved to 1,160 yuan and 1,115 yuan, starting Tuesday.

More than 300 million people in China drive cars that run on petrol or diesel, with Gulf countries a major source of the country's oil.

Long queues of cars had formed outside petrol stations in multiple Chinese cities over the weekend, with some stations having to post notices that they had run out of fuel.

The latest price hike was the country's fifth and largest of the year so far - even with the reduction.

On Tuesday, the price of Brent crude oil jumped above $100 a barrel - a day after prices plunged, as conflicting accounts of potential talks between US and Iran emerged.

Beijing has over the years taken advantage of lower crude prices and the abundance of supply from Gulf states to build one of the world's biggest oil reserves. In January and February of this year, Beijing bought 16% more crude compared to the same time period a year earlier, according to its customs administration.

Iran, whose oil is sanctioned by the US, has been a key supplier of cheap crude for China, with reports suggesting that Beijing buys more than 80% of Iran's oil exports.

Despite its reserves, Beijing has shown signs of caution to manage its supplies in the short-term. Authorities in China reportedly ordered its oil refineries to temporarily cease fuel exports, in an attempt to keep domestic prices under control. China's government did not respond to BBC queries on the matter.

To mitigate the impact of abnormal increases in international oil prices, ease the burden on downstream users and ensure stable economic operations and public welfare, temporary regulatory measures have been adopted.

Other countries across Asia have implemented a range of cost-cutting measures to help cushion the blow of soaring global energy prices. Government employees in the Philippines have been ordered to work four days a week, while in Sri Lanka, every Wednesday has been declared a holiday for public institutions.

Gasoline prices in Japan reached a record high recently, with an 18% increase from the previous week. South Korea's President has also called for public institutions to cut back on their use of passenger cars.