The Chinese mainland lifted its processed oil prices yesterday to offset 
refinery losses and bring domestic prices closer to international levels, but 
promised to subsidize disadvantaged communities and public service sectors. 
Ex-factory gasoline prices will be increased by 300 yuan (US$37.5) per ton 
while the cost of diesel oil will rise by 200 yuan (US$24.9) per ton, the 
National Development and Reform Commission (NDRC), the industry regulator, said 
yesterday. Retail prices for gasoline will also rise by 250 yuan (US$30.8) per 
ton, while diesel prices will rise by 150 yuan (US$18.5) a ton, it said. 
 
 
   A gas station employee 
 in Shanghai fills up a car next to a sign showing the newly raised prices. 
 [newsphoto] | 
 
 
 
 
 
 
   A fuel station in 
 Zhengzhou, central China's Henan Province, displays oil prices in 
 this October 14 file photo. 
 [newsphoto] |    | 
The decision was made because the nation's current prices of processed oil 
are far below those on the international market, it said. 
"This is not beneficial to oil refineries and at the same time does not help 
ensure adequate supplies and improve energy efficiencies," it said in a circular 
published yesterday. 
In Beijing, retail prices for 93 RON grade gasoline rose to 4.65 yuan (about 
58 US cents) a litre from 4.26 yuan (about 53 US cents), and zero-grade diesel 
prices increased to 4.04 yuan (50 US cents) a litre from 3.74 yuan (46 US 
cents), the capital city's development and reform commission said in a separate 
statement, the Bloomberg reported yesterday. RON is the research octane number 
that indicates the quality of the gasoline. 
PetroChina said last week that it lost 19.8 billion yuan (US$2.4 billion) on 
refining and fuel sales in 2005. 
To offset the impact of the rises to groups sensitive to higher prices, the 
commission said the State Council has decided to offer subsidies to communities 
such as fishermen, farmers, State-owned forestry enterprises and urban public 
transportation firms. 
Oil prices have rocketed since 2003, with crude oil reaching more than US$60 
per barrel on the international market this year, far higher than the price paid 
for the commodity by domestic users. Prior to the price hikes, the retail price 
of domestically processed oil was only about US$43 per barrel. 
The taxi and public transport sectors have borne the brunt of these rising 
prices. 
Xue Chunsheng, a manager of the Beijing Yuyang United Taxi co Ltd, said 
yesterday's price rise would increase his company's daily costs by at least 30 
yuan (US$3.7) per vehicle. 
With its more than 4,000 taxis, the price rise will result in an additional 
monthly cost of 3.6 million yuan (US$448,000) for Xue's company. "We are 
expecting the government to unveil preferential policies to help the industry," 
Xue said.