China Raises Fuel Prices; Government Absorbs ~48% of the Hike Through Regulation

Based on official announcements, starting from midnight today, the Chinese government will absorb 47.5% of the calculated gasoline price increase and 48.1% for diesel. The National Development and Reform Commission (NDRC) stated that since the last domestic refined oil price adjustment on March 23, international crude oil prices have fluctuated significantly. To alleviate the impact of rising global oil prices on the domestic market, the government continues to implement regulatory measures. The NDRC required PetroChina, Sinopec, CNOOC, and other crude oil processing enterprises to organize production and transportation effectively, ensure stable market supply, and strictly implement 'national price policies.' These three giants are commonly referred to as the 'Three Barrels of Oil' in China. The NDRC also ordered local departments to increase market supervision and strictly punish those who do not comply with national price policies to maintain market order. On March 23, the previous price hike, gasoline and diesel prices were raised by RMB 1,160 and RMB 1,115 per ton, respectively, while the amounts that should have been raised were RMB 2,205 and RMB 2,120. Chinese media reported at the time that this was the first such intervention since the implementation of the current oil price adjustment mechanism in 2013.