Energy

Oil price hike leads some to pumps, others to bikes

(Xinhua)
Updated: 2011-04-07 17:03

BEIJING - Dozens of vehicles lined up late Wednesday night at a gas station in Shijiazhuang, capital city of North China's Hebei province, to have their tanks filled before another fuel price hike.

China on Thursday increased retail gasoline and diesel prices for the second time this year, as the ongoing conflict in Libya curtailed supplies and post-quake reconstruction in Japan may push up demand.

The ceiling for gasoline prices rose by 500 yuan ($76.3)?a ton and diesel by 400 yuan?a ton, the National Development and Reform Commission (NDRC), the nation's top economic planner, said in a statement.

"I drove to the gas station as soon as I heard about the possible fuel price hike. But there have already been a lot of cars waiting to be filled," a car owner surnamed Wang said.

"'Please top up the petrol tank' is the sentence you hear most often at the gas station right now," Wang added.

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The rush to fill-up indicated that people were trying to minimize the impact of the oil price hike. Having tanks completely filled before the price rise could save drivers around 30 yuan.

Budget-conscious Chinese consumers have been keeping an eye on prices these days, especially after the makers of foods, drinks and personal care products also announced price rises.

Experts said the oil price increase would add to inflationary pressure in China, whose consumer price index (CPI), a major gauge of inflation, has remained high since mid-2010.

China's CPI jumped 4.9 percent in February from one year earlier, exceeding the government's full-year target of 4 percent.

"The oil price rise will contribute 0.07 percent to April's CPI increase, "said Zhao Jidong, an official with the National Bureau of Statistics.

The price hike exceeded people's estimates, as China's fuel prices often rise by 0.2 yuan to 0.3 yuan?a liter each time.

"I have been surprised by the magnitude of the price rise. It rose as much as 0.4 yuan?a liter this time," said Chen Kunsheng, a taxi driver in Nanjing, East China's Jiangsu province.

The NDRC also said on Wednesday that China would continue subsidizing industries including farming, fishing and public transport to offset higher prices.

"The price hike is not bad news for me, because taxis here use natural gas instead of oil," said Yin Wen, a taxi driver in Shijiangzhuang. "But I worry that the rise could cause a ripple effect, pushing up other prices."

China Petroleum, known as Sinopec, said its 2010 net profits rose 13.7 percent from one year earlier to 71.8 billion yuan, according to a statement filed with the Shanghai Stock Exchange last month.

Its rivals, China National Offshore Oil Company Ltd and PetroChina Co, posted a record 84.5 percent and a 35.4 percent rise in profits last year, respectively.

"I don't understand why the government raised oil prices, as Chinese oil companies registered double-digit growth in their earnings last year," a netizen in Guangxi Zhuang Autonomous Region wrote.

Qi Xuming, analyst with Chem365, a consulting firm specializing in the petrochemical industry, said Chinese refiners have suffered from rising prices of imported crude. "The price hike will offset their losses and provide incentives for production, which will help China prevent oil shortages."

China's rapid economic development over the past three decades has led more people to abandon bicycles and buses for cars as the main method of transport.

But the fuel price hike may bring green transportation back into the world's second largest economy.

"It just cost me 4 yuan?a day to take the subway to work, compared to 40 yuan if I use the car," said Zhang Yu, a Beijing resident.

Beijing raised daytime parking fees in downtown areas starting in April in a bid to curb traffic congestion. Fees for roadside parking were raised to 10 yuan for the first hour of parking and 15 yuan for each following hour. Underground car parks now charge 6 yuan per hour, and off-street parking spaces cost 8 yuan per hour.

"I can't afford using a car, as both parking fees and oil prices rose," Zhang said.

Residents in other provinces also showed an increased willingness to use public transportation or share cars with friends.

"I am considering sharing a car with several colleagues to save money and reduce carbon emissions," said Zhang Wei, a resident in Shijiazhuang.

"On one hand, higher oil prices will test the government's ability to contain inflation. On the other hand, it will promote the use of public transport, which is good for our environment," An Tongliang, a professor?at Nanjing University, said.