China's retail diesel and gasoline prices are set to soar to historically high levels, following a surge in global crude oil benchmarks amid the Russia-Ukraine conflict.
Prices of retail diesel and gasoline will both be increased by 110 yuan ($17.34) a tonne effective from Friday, the National Development and Reform Commission said in a statement on Thursday.
Local Chinese authorities will make the adjustment of their respective ceiling prices for the fuel. Beijing, for instance, will see its diesel prices touching 9,805 yuan a tonne, the highest level ever, while gasoline prices will hit 10,880 yuan a tonne, breaking a previous record set two-weeks ago.
Under China's pricing system, retail fuel prices are assessed every 10 working days to reflect global crude oil benchmarks as long as the benchmark prices move between $40 and $130. Outside that band, retail prices do not change or only move marginally.
Brent futures prices have moved between $99 and $124 per barrel in the past 10 days.
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The International Energy Agency has called an emergency ministerial meeting on Friday to discuss the state of the oil market, while the United States is considering its largest release from emergency oil reserve to tame gasoline prices.
{{/usCountry}}The International Energy Agency has called an emergency ministerial meeting on Friday to discuss the state of the oil market, while the United States is considering its largest release from emergency oil reserve to tame gasoline prices.
{{/usCountry}}China's National Food and Strategic Reserves Administration did not respond to Reuters inquiry on if China will tap its strategic reserves.
Chinese oil refiners, both state-backed and independent, are lowering operational rates to cope with high oil prices and ebbing fuel demand in the country owing to the mobility restrictions amid COVID-19 outbreaks.
Multiple cities across China, including the financial hub of Shanghai, are under lockdown. China will celebrate a three-days Qingming holiday, kicking off on April 3, but the stringent COVID rules are expected to limit the number of people travelling.
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Several regions, such as central province of Hunan and Henan, are expected to see nearly 60% fewer cars hitting the road during the holiday this year than a year ago.