China has dialed 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 the 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, according to Ole Hansen, Saxo Bank's head of commodity strategy. In January and February of this year, Beijing bought 16% more crude compared to the same time period a year earlier, with estimates showing China has built up reserves of around 900 million barrels. Despite its reserves, Beijing has shown signs of caution to manage its supplies in the short term and has reportedly ordered its oil refineries to temporarily cease fuel exports.
Authorities in China have stated that temporary regulatory measures have been adopted 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. Other Asian countries are also implementing measures to cushion the blow of rising global energy prices, with various strategies being adopted to conserve fuel and lower costs. Japan and South Korea have particularly been affected, as they rely heavily on oil passing through 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 the 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, according to Ole Hansen, Saxo Bank's head of commodity strategy. In January and February of this year, Beijing bought 16% more crude compared to the same time period a year earlier, with estimates showing China has built up reserves of around 900 million barrels. Despite its reserves, Beijing has shown signs of caution to manage its supplies in the short term and has reportedly ordered its oil refineries to temporarily cease fuel exports.
Authorities in China have stated that temporary regulatory measures have been adopted 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. Other Asian countries are also implementing measures to cushion the blow of rising global energy prices, with various strategies being adopted to conserve fuel and lower costs. Japan and South Korea have particularly been affected, as they rely heavily on oil passing through the Strait of Hormuz.
