BEIJING (Reuters) - The increase in crude oil prices that China’s gasoline and diesel prices are based on has topped a trigger point of 4 percent, an industry estimate showed, suggesting Beijing may consider raising fuel prices after its last hike in April.
The weighted moving average price of Brent, Dubai and Cinta on Jan 27 was 4.1 percent above the level on Oct 7, when China last adjusted pump prices, according to a C1 Energy report published on Sunday.
China is in the middle of revamping the current fuel scheme to better reflect refining costs, with plans to possibly shorten the adjustment period from the current 22 working days and also change the composition of the basket of crudes to which pump prices were linked.
The government may announce the new scheme in the first half of the year, after missing an earlier timeline for the end of 2011 that had been anticipated by the industry.
The C1 estimate, however, might be slightly different than calculations by the National Development and Reform Commission (NDRC) that sets fuel prices in the world’s second-largest consuming country.
The NDRC may choose to delay raising pump prices, which are already near an all-time high.
“The government is quite unlikely to raise prices before the end of the new year celebrations” on February 6, said a marketing official with top refiner Sinopec Corp (0386.HK)
The NDRC has not officially disclosed the specific type of crude oil or the weight it assigned to each crude since it introduced the pricing formula from the start of 2009.
It said the government would consider changing fuel prices if the 22-day moving average of international crude oil prices rises or falls 4 percent, in addition to giving consideration to other factors such as inflation, fuel supply and demand.
China cut retail fuel prices for gasoline and diesel by about 3 percent on Oct 9.
(For a table of China’s retail fuel price history:
Reporting by Jim Bai and Chen Aizhu; Editing by Ken Wills