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Sinopec suggests changing oil price adjustment schedule

By Wan Zhihong and Qiang Xiaoji (chinadaily.com.cn)
Updated: 2010-03-05 16:46

Chen Liguo, general manager of Sinopec Jiangxi Oil Products Co, suggested in a motion to the National People's Congress shortening the interval between oil price adjustments. He suggested that the oil price be adjusted every 10 days instead of the current almost one month and eventually adopt a more flexible and frequent pricing scheme.

Chen said the adjustment will prevent excessive speculation in the oil market and will help the domestic oil price catch up with the changing market.

He also urged making the adjustment plan for when the oil price skyrockets over $100 a barrel. He said the current oil pricing scheme is clear about the pricing policy when the world oil prices fluctuate between $60 and $80 a barrel, but is still vague about the pricing policy when they rise too high.

The global oil price has been around $80 a barrel in 2010, but in the long term, the world oil price is likely to reach $90 and even hit $100 a barrel. So it is crucial to define the pricing scheme for when the oil price breaks $100 a barrel.