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BEIJING - China raised the prices of gasoline and diesel by 350 yuan ($53.2) a ton beginning on Sunday, the National Development and Reform Commission (NDRC) announced Saturday night.
The adjustment is the first this year but the second one in the past two months. The increase would hike the benchmark retail price of gasoline by 0.26 yuan a liter and diesel by 0.3 yuan a liter, the country's top economic planning body said in a statement on its website.
The hike came with an increase in the price of international crude oil, but the timing was "properly postponed" and the rise in price was somehow "limited", the statement said.
The Chinese government adopted an oil pricing mechanism at the start of 2009 that allowed the NDRC to adjust retail fuel prices when the international crude oil prices change by more than four percent over 22 straight working days.
According to Cao Changqing, head of the Department of Price of the NDRC, the government had considered factors, such as the current price situation, the Spring Festival season and the demand and supply conditions in the oil market.
International crude oil price had already jumped by more than four percent as early as Jan 22, Cao said.
As of Feb 17, the average crude oil prices in the Brent, Dubai and Cinta markets had risen by about 11.5 percent during the past two months, according to data from www.oilgas.com.cn, an online oil and gas market monitoring service.
Cao said that the rise would be around 10 percent if the international price trend had to be followed. By hiking gasoline and diesel prices by 350 yuan, the growth came to about 4.5 percent.
The market was expecting a rise of 500 yuan a ton, said Ding Shaoheng, a senior engineer of the China Petroleum Planning Institute.
"We are expecting a 'discount' in the scale of the hike, but not so much," he said.
Liu Zhenqiu, vice-director of the NDRC's price department, said that the government would also continue to provide subsidies to low-income families, farmers, taxi drivers and other sectors that could be hurt by the price adjustment.
China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent in January, which was lower than market expectations, but still higher than last December's reading of 4.6 percent.
The government had ordered railways, urban public transportation systems, and other passenger traffic systems not to hike prices, said Cao.
The NDRC would continue to work to keep consumer prices stable, especially in oil products and food sectors, he added.
In 2010, China's dependence on imported oil jumped to 55 percent from 33 percent in 2009, he said. Imports of crude oil rose 17 percent to 239 million tons in the same period.
Analysts also expected the price hike could ease the lingering fuel shortage, partly as intermediaries tended to hoard fuel on expectations of price increases.
Zhong Jian, a chief analyst with www.oilgas.com.cn, said the adjustment was "timely", which could help boosting market supplies.