Reasonable Price Adjustments to Ensure Stable Economic Operation——Expert Interpretation of This Round of Gasoline and Diesel Price Regulation

Xinhua News Agency, Beijing, March 23 — Title: Reasonable Price Adjustment to Ensure Stable Economic Operation — Experts Interpret This Round of Gasoline and Diesel Price Regulation

Xinhua reporters Wei Hongyi and Dai Jinrong

On March 23, the National Development and Reform Commission announced that based on the current pricing mechanism, starting from 24:00 on March 23, the domestic gasoline and diesel prices (standard products) should each be increased by 2,205 yuan and 2,120 yuan per ton, respectively. After regulation, the actual increases are 1,160 yuan and 1,115 yuan.

Experts say that the recent increase in gasoline and diesel prices is driven by the sharp rise in international crude oil prices caused by escalating conflicts between the US, Israel, and Iran.

Tian Lei, Deputy Director of the Energy Economics Center at the China Macroeconomic Research Institute, stated that recently, due to intensified conflicts between the US and Iran, international crude oil prices have surged significantly, with increases generally exceeding 40% across regions. Especially in the Middle East, crude oil prices have rapidly climbed above $150 per barrel, setting new historical highs, over 130% higher than before the conflict.

“China is a major oil importer, with over 70% of its crude oil sourced externally. The rise in international crude oil prices directly increases our import and consumption costs,” Tian Lei said.

The reporter notes that the actual price increase after this regulation is lower than the calculated increase. Experts explain that this move aims to ensure stable domestic economic operation.

Lü Zhichen, Deputy Director of the Price, Cost, and Certification Center of the National Development and Reform Commission, introduced that according to the current domestic refined oil pricing mechanism, the maximum retail prices for gasoline and diesel should each be increased by 2,205 yuan and 2,120 yuan per ton, respectively. Such a large increase would significantly raise fuel costs and impact the stable operation of related industries.

“To mitigate these adverse effects and reduce the burden on downstream users, the government has implemented temporary regulation measures on refined oil prices,” Lü Zhichen said. The actual increase for domestic gasoline and diesel is 1,160 yuan and 1,115 yuan per ton, respectively, which is 1,045 yuan and 1,005 yuan less than the maximum allowed. This roughly translates to a decrease of about 0.85 yuan per liter for the national average gasoline and diesel prices.

“In recent years, refined oil prices have been adjusted according to the current mechanism. This is the first regulation since the implementation of the current mechanism in 2013. This move fully demonstrates China’s institutional advantages and is a timely and effective response to the sharp rise in international oil prices, playing an important role in ensuring stable domestic economic operation,” said Dong Xiucheng, a professor at the University of International Business and Economics.

Currently, the US, Israel, and Iran conflict continues. Experts analyze that if international crude oil prices continue to rise sharply, the government may take further regulatory measures.

The current domestic refined oil pricing mechanism sets a price regulation cap at $130 per barrel. Dong Xiucheng explained that if the average international crude oil price exceeds $130 per barrel (corresponding to an average retail price of about 10 yuan per liter for domestic No. 92 gasoline), the maximum retail prices for gasoline and diesel will not increase or will increase only slightly for the excess portion. To stabilize supply, the government may also implement some fiscal and tax support policies.

For example, in 2022, the Russia-Ukraine conflict caused a significant increase in international oil prices. At that time, the government clearly stated that once international oil prices exceeded the $130 per barrel cap, domestic refined oil prices would not be raised in the short term (no more than two months), and refineries would receive phased subsidies.

The reporter learned that the current domestic refined oil pricing mechanism stipulates that the maximum retail prices for gasoline and diesel are based on international crude oil prices and are adjusted every ten working days. Since 2013, domestic refined oil prices have been adjusted according to this mechanism, which considers the changes in the average international crude oil prices over the ten days prior to each price adjustment. The recent period saw 7 price increases and 12 decreases, with 6 no adjustments in 2025. (End)