Gas price increases for the second time this year

Filling a private car in Shanghai will cost about 2.5 yuan (39 US cents) more from tomorrow, following the second price increase this year in line with rises in global crude prices.

The Shanghai Development and Reform Commission just announced that the ceiling price for 92-octane gasoline will be 7.00 yuan per liter, up from 6.95 yuan; a liter of 95-octane gasoline will sell at 7.45 yuan, rising from 7.39 yuan; and diesel will hit 6.63 yuan per liter, up from 6.58 yuan.

New prices will take effect from midnight tonight, meaning that for a standard-sized car with a 50 liter tank, the cost to fill up will rise by about 39 cents tomorrow.

This is the second fuel price rise this year, with governments nationwide adjusting prices every 10 working days following crude fluctuations.

Under the current pricing mechanism, if global crude prices change by more than 50 yuan per ton and remain at that level for 10 working days, the domestic price of refined oil products covering gasoline and diesel will be adjusted accordingly.

Crude prices have stayed at three-year highs over the past several weeks along with shrinking US crude inventories, with Brent crude closing at US$70.12 per barrel yesterday, the highest since late-November 2014.

Triggered by continuous price increases, China’s gasoline has gained in price by 245 yuan per ton this month, and diesel gas has risen 235 yuan per ton.

Domestic analysts at consultancies such as sci99.com and oilchem.net expect fuel prices to fall at the next adjustment which will come on February 9, given Brent crude has been dropping since January 24. 

However, uncertainties remain as the United States has been slowing down crude exploration, while members of the Organization of Petroleum Exporting Countries have been continuously cutting production.