June 20, 2008

China Raises Energy Prices Sharply

China joined other Asian nations in raising its subsidized domestic prices of gasoline, diesel oil, aviation kerosene and electricity.

The new prices, effective Friday, were announced by the National Development and Reform Commission, the nation's top economic planner, saying the price adjustment was needed to ensure supplies by diminishing the gap between continuously rising international crude prices and state-set domestic oil prices, Xinhua reported.

Diesel prices went up 18 percent to the equivalent of $3.58 a gallon and gasoline 16 percent to $3.83 a gallon, the International Herald Tribune reported.

Aviation kerosene will cost about $1 per gallon. Electricity rates will go up an average of 4.7 percent per kilowatt hour.

The commission left the prices of natural gas and liquefied petroleum gas unchanged, Xinhua said.

A commission official blamed the government-controlled oil prices for the shortfall of supplies with some refineries stopping or cutting back on processing to reduce losses.

To ease the higher price impact on the public, the report said taxi and urban and rural rail fares will remain the same.