Identifier
Created
Classification
Origin
09BEIJING152
2009-01-16 11:48:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Beijing
Cable title:
CHINA CUTS GASOLINE AND DIESEL PRICES, AGAIN
how-toVZCZCXRO8800 PP RUEHCN RUEHGH RUEHVC DE RUEHBJ #0152 0161148 ZNR UUUUU ZZH P 161148Z JAN 09 FM AMEMBASSY BEIJING TO RUEHC/SECSTATE WASHDC PRIORITY 1907 INFO RUEHOO/CHINA POSTS COLLECTIVE PRIORITY RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY RHEHNSC/NSC WASHDC PRIORITY
UNCLAS BEIJING 000152
SENSITIVE
SIPDIS
STATE FOR EAP/CM AND EEB/ESC
TREASURY FOR OASIA/DOHNER, CUSHMAN
E.O. 12958: N/A
TAGS: ENRG EINV ECON EPET EFIN CH
SUBJECT: CHINA CUTS GASOLINE AND DIESEL PRICES, AGAIN
REF: 08 BEIJING 04615
UNCLAS BEIJING 000152
SENSITIVE
SIPDIS
STATE FOR EAP/CM AND EEB/ESC
TREASURY FOR OASIA/DOHNER, CUSHMAN
E.O. 12958: N/A
TAGS: ENRG EINV ECON EPET EFIN CH
SUBJECT: CHINA CUTS GASOLINE AND DIESEL PRICES, AGAIN
REF: 08 BEIJING 04615
1. (U) Official media reported on January 14 that China cut
its benchmark retail gasoline and diesel prices by 2 percent
and 3.2 percent respectively. This is the first cut since
China's new pricing mechanism took effect at the beginning of
2009 (see Ref). This move follows the Government's December
19 move to cut the price for gasoline by 14 percent and 18
percent for diesel. After this price cut, gasoline prices
for 93 octane have now fallen to RMB 5.44 per liter (3.03 USD
per gallon). (Note: Singapore gasoline spot prices are
running around 1.13 USD per gallon at the moment. End Note.)
2. (SBU) Official media cited Xu Kunlin, Deputy Director
General of the National Development and Reform Commission
(NDRC) Pricing Bureau, as saying the cut is triggered by the
crude oil price decline in global markets and that there is
still room for a further cut in domestic fuel prices despite
recent fluctuations in global prices. An NDRC researcher was
also quoted saying the price change "means domestic fuel
prices will react more quickly to changes on the global
markets in the future." The NDRC, however, also said in a
statement on its website that it is not appropriate that fuel
prices be adjusted "too frequently." Zhao Ying, Senior
Researcher at the Institute of Industrial Research, Chinese
Academy of Social Sciences, commented to Econoff on 16
January that the fuel price decrease is one of a series of
measures by the government to increase car sales and expand
domestic internal demand. Comment: This latest move can be
seen as part of an effort to bring fuel prices into line with
world prices and therefore as a market-friendly move. But
the small size of this price cut actually helps make up for
refiners' losses incurred when retail prices did not cover
the cost of inputs. This move therefore has an
interventionist aspect as well. End Comment.
Randt
SENSITIVE
SIPDIS
STATE FOR EAP/CM AND EEB/ESC
TREASURY FOR OASIA/DOHNER, CUSHMAN
E.O. 12958: N/A
TAGS: ENRG EINV ECON EPET EFIN CH
SUBJECT: CHINA CUTS GASOLINE AND DIESEL PRICES, AGAIN
REF: 08 BEIJING 04615
1. (U) Official media reported on January 14 that China cut
its benchmark retail gasoline and diesel prices by 2 percent
and 3.2 percent respectively. This is the first cut since
China's new pricing mechanism took effect at the beginning of
2009 (see Ref). This move follows the Government's December
19 move to cut the price for gasoline by 14 percent and 18
percent for diesel. After this price cut, gasoline prices
for 93 octane have now fallen to RMB 5.44 per liter (3.03 USD
per gallon). (Note: Singapore gasoline spot prices are
running around 1.13 USD per gallon at the moment. End Note.)
2. (SBU) Official media cited Xu Kunlin, Deputy Director
General of the National Development and Reform Commission
(NDRC) Pricing Bureau, as saying the cut is triggered by the
crude oil price decline in global markets and that there is
still room for a further cut in domestic fuel prices despite
recent fluctuations in global prices. An NDRC researcher was
also quoted saying the price change "means domestic fuel
prices will react more quickly to changes on the global
markets in the future." The NDRC, however, also said in a
statement on its website that it is not appropriate that fuel
prices be adjusted "too frequently." Zhao Ying, Senior
Researcher at the Institute of Industrial Research, Chinese
Academy of Social Sciences, commented to Econoff on 16
January that the fuel price decrease is one of a series of
measures by the government to increase car sales and expand
domestic internal demand. Comment: This latest move can be
seen as part of an effort to bring fuel prices into line with
world prices and therefore as a market-friendly move. But
the small size of this price cut actually helps make up for
refiners' losses incurred when retail prices did not cover
the cost of inputs. This move therefore has an
interventionist aspect as well. End Comment.
Randt