The New Nation - Internet Edition

Xinhua, Beijing

China will raise the prices of gasoline, diesel oil and aviation kerosene by 500 yuan per ton, almost a 10 percent rise, starting from November 1, China's economic planner announced on Wednesday.

The average retail prices of gasoline and diesel oil was lifted to 5,980 and 5,520 yuan per ton from 5,480 and 5020 yuan.

The adjustment was made to shorten the gap between high- flying international crude prices and state-set domestic oil prices, according to the National Development and Reform Commission. The government-controlled oil prices in domestic market had been blamed for a shortfall of oil supply, as some refineries would stop processing to avoid losses while some producers and dealers would hoard up oil to gain more profits in the case of possible price hikes, said Liu Zhenqiu, vice director of the price department of the NDRC.

Crude price in international market has reached 93.53 U.S. dollars per barrel on October 29, up over 80 percent from the price at the beginning of the year.

"If the crude price is 80 U.S. dollars per barrel, domestic refineries will lose 600 yuan for each ton of crude they process, and 1,000 yuan for each ton of oil they produce," said Liu. To increase oil supply and keep the domestic market stable, China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec) ordered their refineries to work almost full power. CNPC pushed up its processed oil output by nearly 10 percent in the third quarter compared with the same period last year.

After importing 60,000 tons of gasoline in September and 90,000 tons of diesel oil in October, Sinopec said it planned to buy more diesel oil in November to relieve the tightened domestic demand. CNPC also imported 200,000 tons of gasoline and diesel oil to the coastal market in the third quarter, and tuned down oil export.