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Reduce use to cope with big price rise

(China Daily)
Updated: 2009-07-03 07:55

The fuel price rise has triggered a wide range of reactions in society, says an article in Economic Information Daily. Excerpt:

As Xu Xiaoming, a Beijing-based car dealer said, people will prefer fuel-efficient small cars to big ones such as SUVs after the increase in fuel prices.

Lu Wei, another city car dealer, said consumers could afford higher fuel prices because the additional cost per 100 km would come to be only 50-60 yuan for fuel-efficient cars. Policies are the most important factor for the auto market apart from the purchasing power of the people. And a survey showed that oil prices were least important for car-buyers. What they are bothered most about are car prices and safety.

But some people believe the fuel price rise could have a negative impact on the market. "The price rise will soon dampen the car-buying frenzy that started recently," Su Hui, an auto industry insider, said.

Netizens vent their anger over the price rise, with almost 90 percent of them saying they would use their cars less frequently and 94 percent complaining the increase was too high.

One of the netizens urged the government to revise the pricing system, and said fuel prices have almost reached last year's levels when the crude was selling for a record $140 a barrel.

Lin Boqiang, a Xiamen University professor, attributed the high fuel price in China to three factors: tax, costs of delivery and sales fuel, and refining costs. The current tax per liter of fuel in China is 1.7 yuan - almost twice as much as that in the US. Fuel delivery and sales costs in China are 20 percent higher compared with the US. China depends heavily on fuel imports and buys them at a higher price than the US. In 2008, the average purchasing price for imported oil in the US was $93 a barrel, while in China it was $99.

Economist Niu Li has suggested the most effective way to deal with the price rise is reducing consumption. Consumers must raise their awareness level about efficient use of fuels and auto-makers should be regulated to produce more fuel-efficient cars.

(China Daily 07/03/2009 page13)