China May Raise Refined Oil Prices on Aug. 27

飞雪寒冰

China may raise prices for refined oil products by about 500 yuan per ton on Aug. 27, energy industry consultancy CBI China said, citing "several insiders" from China's top two refiners.  

CBI, in an Aug. 26 report, said it could not officially confirm its informants' claims.

The current pricing mechanism authorizes the National Development and Reform Commission to adjust prices for refined oil if international crude prices fluctuate by more than 4 percent over 22 consecutive trading days.

The last revision was on July 29. Since then, international crude prices have risen more than 10 percent, putting China in a window for a domestic price adjustment. However, the NDRC retains broad discretion in the employment of its powers and can decide against a price adjustment even if the 4 percent condition is met. The commission has adjusted price caps four times this year.

The new pricing system, implemented in late 2008, brings domestic oil prices more closely in line with international crude prices and allows refiners to earn an "appropriate" profit.

China Petroleum and Chemical Corporation's first-half net profit soared 330 percent year-on-year to 33 billion yuan, largely as a result of reforms to the pricing of refined products. China National Petroleum Corporation is expected to issue its financial report on Aug. 28.

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