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Public grumble over fuel price rise

(Xinhua)
Updated: 2009-07-01 21:42

As consumers questioned on the widening gap with the US fuel prices, experts held a different view.

"Fuel prices between the two nations are incomparable because of their different composition," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

Related readings:  China raises gasoline, diesel prices  China to raise gasoline, diesel benchmark retail prices  Experts: Oil prices may go up further  Consumers feel the pinch of higher oil prices  China refines record 31m tons of crude oil in May

According to the new rules, fuel prices takes into account crude prices, taxes and a profit margin for refiners.

Lin cited the increased fuel consumption tax in China, which is twice the average in the United States.

On January 1 this year, China raised the gasoline consumption tax from the previous 0.2 yuan per liter to one yuan per liter, and diesel consumption tax from 0.1 yuan per liter to 0.8 yuan one liter, and annulled six types of fees on road maintenance and management, to enable drivers to pay less if they drive less.

Lin noted in China the costs of transportation and marketing takes up 20 percent of the retail prices, while that number for the United States is only 12 percent.

"The cost gap could be 0.8-1.0 yuan per tonne," he said.

He also attributed the gap to higher refining costs in China.

China's domestic fuel prices have long been lower than the international costs as government capped the prices to prevent the increasing costs passing to end users.

In response to the netizens' concern over easy price rises but harder-to-see price cuts, which had lingered for months,  Xu Kunlin, deputy head of the pricing department of the NDRC said in an interview with Xinhua on May 8 that it is a "misunderstanding".

He said since the new rules took effect, the gasoline prices were cut by 1,140 yuan per tonne and boosted by 290 yuan per tonne. diesel prices were cut by 1,260 yuan per tonne and raised by 180 yuan per tonne.

Lin Boqiang noted if China wants to keep links with international prices, the domestic prices will be higher than the US prices because of higher tax.

High fuel use tax and the retail price rise will help curb oil consumption amid the mounting oil use in China, said Niu Li.

According to Sina's survey, 90 percent of the respondents said they will drive less because of the high fuel prices.

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