China shocks with 18 percent fuel price rise

China's rapid demand growth was one of the catalysts for oil's surge from $20 six years ago to a record high of nearly $140 a barrel earlier this week.

The latest increase took many market watchers by surprise as Beijing has repeatedly vowed to rule out "near-term" price increases to battle high inflation and avoid social unrest barely two months away from the Beijing Olympics.

Fearful of stirring popular resentment, Beijing pledged subsidies to weaker groups such as farmers, fishermen and cab drivers, right after the announcement of the price hike.

In Beijing and Shanghai, motorists queued for gasoline at petrol stations on Thursday night as word of the price hike leaked out. Police stood by at one Beijing petrol station.

At least one station told customers that it could not serve them until the price hike took effect at midnight, prompting an altercation between staff at the station and a group of angry motorists.

(additional reporting by Simon Rabinovitch; editing by James Jukwey)