China: An Exploratory Fuel Price Increase
Friday, June 20th, 2008The Chinese government announced June 19 that it will raise the price ceiling on a number of energy products by 5 percent to 25 percent. However tentatively, the Chinese are thus beginning to accept the challenge of running the gauntlet between unemployment and inflation.
Yesterday China announced that it would raise diesel & gasoline prices by 1000 yuan/ton, equivalent to around $0.48/gallon. With current prices around $2.70/gallon, this amounts to an increase of +18%. In addition China is expected to raise jet-fuel prices by 1,500 yuan/ton, or +25% today. On July 1, China will also increase electricity prices by an average 0.025 yuan/kilowatt-hour, or +4.7%.