Sales of new vehicles in the world’s largest market continue to rise, but might another increase in the price of petrol and diesel make millions of potential car buyers delay their purchase?
China’s National Development and Reform Commission lifted the retail prices of petrol and diesel this week, the fourth such rise of 2012, according to China Daily.
The newspaper notes that retail petrol went up by CNY0.41 per litre (+6.0%), with diesel rising by CNY0.46/litre (+6.5%).
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The price rises will not affect the CPI, a key gauge of inflation, too much, and there will not be big changes before the US presidential election in November, China Daily quotes Lin Boqiang, director of the China Center for Energy Economic Research at Xiamen University as saying.
“The oil price will remain stable for a period,” he said. “The CPI will not rebound dramatically soon.”
Prior to this week’s rises, China last lifted fuel prices in both February and March. It then cut prices in May, June and July.
The last price increase was on Aug 10, when retail petrol prices increased by CNY390 a ton and diesel prices by CNY370 a ton.
The government has acted swiftly this year to accelerate the internationalisation of the energy industry and form a market-driven system for energy prices based on saving energy and reducing subsidies, said Liao Kaishun, a senior analyst at energy consultancy ICIS C1 Energy is quoted as stating.
“Although the pricing mechanism includes upstream costs, it does not consider demand and supply in the downstream sector, which cannot reflect the whole picture,” he said. “It is a challenge for the government to maintain this balance.”
Author: Glenn Brooks
