China has raised the official price of oil:
SHANGHAI, June 19–After resisting pressure to hike fuel prices for 7 1/2 months, China–the world’s second-largest consumer of oil–said late Thursday it would dramatically raise the cost of gasoline and diesel.
China’s chief economic planning body, the National Development and Reform Commission, said gasoline and diesel would go up by 1,000 yuan or $145 per ton — 17 and 18 percent respectively. Aviation fuel, meanwhile, would rise by 1,500 yuan or $218 per ton.
The current price of oil in China is about $1.60 per gallon. A 17% increase would boost that to $1.90, still obviously well below world prices. If you’re wondering why Chinese oil consumption is rising, indeed, why for each additional dollar of GDP China uses proportionally more oil to produce it than the last dollar, you need look no farther. Chinese businesses and individuals are insulated from the rising price of oil.
