China has announced plan to increase retail prices of petrol and diesel on Thursday, as the local market reacts to the rise in international oil prices.
Trading Economics reports that WTI crude oil futures advanced to over $84 per barrel on Wednesday, the highest since November 2022, amid growing concerns of low supply.
China says gasoline prices would increase 240 yuan (33.53 U.S. dollars) per tonne, and diesel prices 230 yuan per tonne, the National Development and Reform Commission said in a statement on Wednesday.
Under the current pricing mechanism, the prices of refined oil products are adjusted following changes in international crude oil prices.
The commission said China’s three biggest oil companies and all refineries have been directed to maintain oil production and facilitate transportation to ensure stable supplies.
The companies are China National Petroleum Corporation, China Petrochemical Corporation and China National Offshore Oil Corporation.
Commodity markets continued to fret about production cuts from key OPEC+ members as Saudi Arabia reaffirmed its commitment to rein in production and balance market pressures after announcing its voluntary 1 million barrel-per-day cut last week.
Russia has pledged to cut exports by 300,000 barrels per day starting next month. In the meantime, fresh data from the EIA showed that crude oil inventories rose by 5.85 million barrels on the week ending August 4th, well above market expectations of a 0.56 million-barrel build. Still, the figure failed to offset the record-high 17.05 million-barrel draw from the prior week, while gasoline and distillate fuel stocks booked sharp declines.
Limiting the increase, weak trade turnover and deflationary pressure in China magnified concerns over the country’s struggle to recover economically.