Pricing calls for public voice
The oil price hike came about just three days after the authorities ruled out any immediate increase. Earlier, the public had to wait for three months for the domestic oil price to drop after the international oil prices plummeted. Lack of strict supervision as well as public participation are the basic reasons for the disorder in China's oil price adjustment system, says an article in Guangzhou Daily. Excerpts:
The National Development and Reform Commission (NDRC) announced that the prices of gasoline and diesel would be raised by 400 yuan per ton from June 1, which was way beyond public expectation. This is strange because only three days before the NDRC had ruled out any immediate increase in fuel prices.
According to "Oil Price Management Methods (Trial)", the authority can accordingly adjust the prices of gasoline and diesel after the change of the average price of crude oil in international market exceeds 4 percent for 22 consecutive days.
However, this document, which should have taken effect from May 7, had already come into force on March 25. In the latest case, hike in the price of oil products was announced three days after an official denial of any price increase was released.
But last time it took three months for the authorities to lower prices after the oil prices fell in the international market. It is hard for the public to understand the logic behind such actions.
The only conclusion that can be drawn is that the authorities act quicker when it comes to increasing prices, perhaps for the benefit of oil companies.
The essence of the disorder in the price adjustment system is that it does not work as well as it should. The lack of consumer participation is one reason why the system does not work. And, price adjustment is something that should not be manipulated by oil companies.
The public has the right to participate in framing rules for oil price adjustment. For this the pricing authorities should provide regular information about the cost and price of international crude oil in time, and strictly supervise the adjustment process. Stricter rules and public participation, it is felt, can guarantee the fairness in oil price adjustment.
(China Daily 06/03/2009 page8)
