China unveils details of new oil pricing mechanism

The National Development and Reform Commission (NDRC), China’s top economic adviser, said that the country’s new oil pricing mechanism, which was implemented at the beginning of the year, would adjust domestic fuel prices when global crude prices report a daily fluctuation band of more than 4% for 22 working days in a row. However, fuel prices would not go further up, or would only be raised by a small margin, when crude prices rise above US$130 per barrel, and fiscal or tax measures would be implemented to ensure supplies. While the government would continue to control fuel prices, the country’s new pricing scheme allows for rates to eventually be determined by market conditions. China’s retail fuel prices vary in different regions. (May 8, 2009)