Gasoline in China is the most expensive in years. The government intervenes to save the market from a spike in oil prices

China's State Development and Reform Commission announced on Monday an increase in fuel prices, but limited the scale of the increase by half compared to market prices. The decision is intended to protect the economy against the effects of the jump in oil prices caused by the war between the United States and Israel with Iran, media report.

From Tuesday, retail price limits for gasoline will increase by 1,160 yuan (approx. USD 168) per tonne, and for diesel – by 1,115 yuan (approx. USD 161).

Without government intervention resulting from the current pricing mechanism, the increases would amount to 2,205 and 2,120 yuan ($319 and $307, respectively) per tonne.

According to calculations by state media, the price of 92-octane gasoline will increase by 1.73 yuan (approx. USD 0.25) per liter, and diesel oil – by 1.87 yuan (approx. USD 0.27). This means that the popular “92” will break the psychological barrier of 9 yuan (approx. USD 1.30).

The government daily Global Times points out that the government intervention will translate into savings for drivers of 40-50 yuan (approx. USD 6.5) per 50-liter tank compared to what they would pay without the cover.

Reuters emphasizes that despite this intervention, the increases are record-breaking and have pushed prices to levels not seen since Russia's full-scale invasion of Ukraine in 2022.

From Sunday, after announcements from the state-owned company Sinopec, queues began to form in front of distributors, according to posts on social media platforms.

China covers approximately 70 percent. its demand for imported crude oil, with approximately 45 percent This import takes place through the Strait of Hormuz, reports the Hong Kong daily “South China Morning Post”.

Iran is blocking traffic through this key waterway for transporting energy resources in response to the US and Israeli attacks that began on February 28, which led to a spike in oil prices around the world.

According to the estimates of the analytical company Kpler, probably over 90 percent. Most of Iran's oil exports go to China – often to smaller, independent refineries that continue to buy the raw material at a discount, despite the sanctions in force.

From Beijing Krzysztof Pawliszak (PAP)

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