China has announced a rise in domestic oil product prices - the first in eight months.China's National Development and Reform Commission said that refinery petrol prices were raised by Rmb300 ($37.36) a tonne and those for diesel by Rmb250 in order to "mitigate the serious inversion of the prices of crude oil and domestic oil products". The Commission also announced that subsidies will be introduced for some disadvantaged groups and public-good industries.
FT.Com reports that China's refining sector lost a reported Rmb30bn in 2005, and refiners' "lack of enthusiasm for supplying the domestic oil products market led to severe shortages in some parts of the country last summer. In spite of China's increasing reliance on imported oil, Beijing has been unwilling to pass price increases on to the pump out of concern over the impact on already hard-pressed farmers and vocal urban groups such as taxi drivers".
