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Page added on November 1, 2007

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China Unexpectedly Raises Fuel Prices as Oil Surges

Nov. 1 (Bloomberg) — China unexpectedly increased fuel prices by as much as 10 percent in an “urgent step” to help the nation’s oil refiners cover surging costs as crude touched records above $96 a barrel.

To “guarantee domestic refined oil supply and promote energy conservation,” gasoline, diesel and jet fuel prices will rise 500 yuan ($67) a metric ton starting today, the National Development and Reform Commission said late yesterday. China Petroleum & Chemical Corp., Asia’s largest refiner, surged in Hong Kong and Shanghai trading.

China controls fuel prices to limit their impact on inflation in the world’s most-populous nation. The commission, China’s top economic planner, said in September there would be no energy price increases this year because inflation was exceeding a government target.

“It’s a prudent measure — to let businesses and consumers face the real price of oil,” said David Cohen, an economist at Action Economics in Singapore. “China’s probably the biggest source of pressure on global oil prices, because of its surge in demand.”


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