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            Home>News Center>China
                 
           

          China may tweak oil price-setting formula
          (Reuters)
          Updated: 2005-08-21 08:59

          BEIJING, Aug 20 - (Reuters) China is considering a new method for setting domestic oil product prices that could lead to more frequent adjustments aimed at easing the sort of shortages that have hit the south of the country, a newspaper reported on Saturday.

          Drivers queue at petrol pumps on Wednesday in Dongguan in South China錕絪 Guangdong Province. The fuel shortage affecting Guangdong is dragging on. Feng Zhoufeng
          Drivers queue up to buy petrol at a gas station in Dongguan in South China's Guangdong Province August 17, 2005. The fuel shortage affecting Guangdong is dragging on. [Feng Zhoufeng]
          China has raised retail prices of diesel and gasoline three times this year, but the increases have fallen far short of the spike in global prices.

          This has made it difficult for China's refiners to turn a profit and has encouraged them to boost exports at the expense of domestic sales. The result has been widespread shortages recently in the south, with drivers queueing for hours for petrol.

          To tackle the problem, top planners at the energy policy-setting National Development and Reform Commission (NDRC) called in oil firm executives on Aug. 13 to discuss the future of its pricing system.

          The China Business Post said the meeting discussed updating a formula that usually leads to price changes coming at least a month apart.

          "According to sources, the reform measures are to gradually relax the power to set oil product prices, moving from a lagging set price to a real-time price by reducing the time span from a one-month tracking method to two weeks or even less," the paper said.



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