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China newspaper pleads for higher fuel prices

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  • China newspaper pleads for higher fuel prices

    Hi all,

    Here is some interesting news!

    BEIJING (Reuters) - As most of the world struggles to cope with the impact of crude prices soaring over $60 a barrel, an influential Chinese paper on Thursday made an unusual call for higher fuel prices to protect the national economy.

    Central bankers worldwide have been fretting that expensive oil could foster inflation and dent consumer demand.

    But Chinese citizens, protected from spiralling global prices by Beijing's policy of capping prices for diesel and gasoline, have been burning fuel until pumps ran dry in some areas, leading to rationing and long queues in the export hub of Guangdong.

    Low state-set prices are behind the shortages, because they mean refiners make a loss on the products they sell and so have trimmed supplies even to their own-brand service stations -- hence the petition for more expensive gasoline.

    "Domestic oil prices must be allowed to rise to restore a balance between supply and demand," the China Daily said in an editorial, although it cautioned that the higher prices would likely dent efforts to boost domestic consumption.

    "Delaying admitting the real situation and failing to take decisive action now will give runaway oil prices free rein to hurt the economy later."

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