The fifth round of price hikes on gasoline and diesel fuel on the Chinese market nationwide in the past eight months was announced on July 14.

The State Development Planning Commission released a circular to raise the benchmark price of gasoline by 200 yuan (US$24) and that of diesel by 180 yuan (US$21.7) per ton. That means the gasoline benchmark price was lifted from 3,510 yuan (US$422.9) to 3,710 yuan (US$447) per ton while the diesel benchmark price was raised from 2,924 yuan (US$352.3) to 3,104 yuan (US$374) per ton.

Retailers are allowed to raise or drop prices by 5 per cent from the benchmark levels.

Seeming to offset the effect of the price hike, authorities in Beijing have asked to decrease taxis' minimal mileage for the base price 10 yuan (US$1.2) from 5 to 4 km for Xiali cars, and from 4 to 3 km for Fukang and Santana cars.

An official from the State Development Planning Commission said it is difficult to foresee if prices would go up or down.

The domestic price changes are aimed at furthering the integration process of domestic and international oil product price levels, he said.

The commission decided last month to set refined oil prices monthly in accordance with fluctuations on international market.

The monthly-modified benchmark prices are equal to the sum of the average prices in Singapore's market last month, with a reasonable premium to account for costs and losses in transportation, the official explained.

If international oil prices continue to fall in July as Saudi Arabia announced a planned hike in oil production last week, there would be a price slide in August in the domestic market, according to the official.

But the official stressed the fuel prices in China are still much cheaper than in developed countries because of different tax levels.

(China Daily)