Credible signals

The second price hike within a month has added credibility to China's new fuel pricing mechanism. This marks a beginning towards making market-based price signals a powerful measure for energy conservation.

After a small hike on June 1, the National Development and Reform Commission yesterday promptly raised the pump prices of gasoline and diesel prices to record levels though international crude prices stand at only half of the peak price of $147 a barrel reached last year.

The latest price hike must have caught most Chinese car owners by surprise though it should have been anticipated after the new pricing mechanism was announced on May 8.