China Unexpectedly Raises Fuel Price by 10%

China has raised retail prices for gasoline and diesel by about a tenth, which is the third time for the country to raise fuel price since March in an attempt to bring the price in line with international level, reported Reuters.

The National Development and Reform Commission announced on late Monday it was increasing retail prices for gasoline and diesel by about 600 yuan ($87.80) per tonne.

Now at $3 a gallon, Chinese motorists will pay about one-eighth more for a fill-up than Americans, who were paying an average $2.66 a gallon last week, the report said.

The price increases will give China's major fuel suppliers, Sinopec and PetroChina, an incentive to stem massive exports of gasoline and diesel, but may also stifle consumers' demand for new cars, which has seen rapid growth in recent months.

The latest move follows an increase of 6% to 7% in gasoline and diesel prices on June 1, and a 3-5 percent increase in late March.

China introduced a "perfected" fuel pricing mechanism from the beginning of this year to bring local prices more in line with crude oil costs, which allow the prices to be adjusted more frequently.