China to hike gasoil, gasoline prices Yuan 500/mt May 24: traders

Hong Kong (Platts)--23May2006

The Chinese government is expected to hike its wholesale "guidance"
prices for gasoil and gasoline nationwide by Yuan 500/mt ($62.50/mt) effective
Tuesday midnight, mainland traders told Platts Tuesday.
Gasoil wholesale guidance price is expected to rise to Yuan 5,180/mt from
the current Yuan 4,680/mt, while gasoline prices are expected to rise to Yuan
5,888/mt, Yuan 6,193/mt and Yuan 6,499/mt for 90 RON, 93 RON and 97 RON grades
respectively, traders said.
This would be the second price increase this year, following the last one
on March 26, which boosted gasoil at the wholesale level by Yuan 200/mt and
gasoline by Yuan 300/mt, and was deemed sorely insufficient for the Chinese
refiners to recover their spiralling crude costs.
The last government price hike before the March adjustment was in June
2005. The Chinese government's policy of keeping a tight lid on domestic oil
products prices while international crude prices skyrocket has dried up
profits at the Chinese refiners.
The last increase on March 26 raised wholesale guidance price in the
southern Guangdong province by 4.5% or Yuan 200/mt ($3.34/barrel) to Yuan
4,680/mt ($78.23/barrel or $1.86/gallon). Gasoline saw a Yuan 300/mt hike to
Yuan 5,388/mt ($78.94/barrel or $1.88/gallon), Yuan 5,693/mt and Yuan 5,999/mt
for 90 RON, 93 RON and 97 RON grades respectively, up 5.3-5.9%.
"The latest price hike will amount to 8.5-11% and the increase is the
largest in two years," said a trader. However, "the new guidance oil prices
will still be below the crude price equivalent of $55/barrel, and still lag
the high international oil prices," he added.
The retail prices for both gasoil and gasoline would also rise by Yuan
500/mt in line with the wholesale rates, traders said.
The retail price of gasoil is expected to rise by about Yuan 0.43/liter,
and of gasoline by about Yuan 0.38/liter, they added.
Beijing allows actual prices at the wholesale level to fluctuate in a
range of plus 8% to minus 8% around its guidance prices.

 

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