China dials back on fuel price hikes to 'reduce burden' o...

What’s Happening

Not gonna lie, It comes as countries across the region are taking various measures to weather the soaring cost of fuel.

China dials back on fuel price hikes to reduce burden on drivers 56 minutes ago Save Gavin Butler Save China has already hiked fuel prices five times this year China has dialled back on planned fuel price hikes in a bid to “reduce the burden” on drivers, as energy costs surge amid the Iran war. The local price of petrol has jumped by about 20% since the start of the conflict, which has seen Iran effectively close one of the worlds busiest oil shipping channels, the Strait of Hormuz. (shocking, we know)

Gasoline and diesel prices were initially set to rise by 2,205 yuan (£239; $320) and 2,120 yuan per tonne respectively – but after government adjustments, the increases will be nearly halved to 1,160 yuan and 1,115 yuan, starting Tuesday.

The Details

More than 300 million people in China drive cars that run on petrol or diesel, with Gulf countries a major source of the countrys oil. Long queues of cars had formed outside petrol stations in multiple Chinese cities over the weekend, with some stations having to post notices that they had run out of fuel.

The latest price hike was the countrys fifth and largest of the year so far - even with the reduction. On Tuesday, the price of Brent crude oil jumped above $100 a barrel - a day after prices plunged, as conflicting accounts of potential talks between US and Iran emerged.

Why This Matters

Beijing has over the years taken advantage of lower crude prices and the abundance of supply from Gulf states to build one of the worlds biggest oil reserves, Ole Hansen, Saxo Banks head of commodity strategy, told the BBC last week. In January and February of this year, Beijing bought 16% more crude compared to the same time period a year earlier, according to its customs administration. Iran, whose oil is sanctioned , has been a key supplier of cheap crude for China, with reports suggesting that Beijing buys more than 80% of Irans oil exports.

Diplomats and experts are analyzing what this means for international relations.

The Bottom Line

Iran, whose oil is sanctioned , has been a key supplier of cheap crude for China, with reports suggesting that Beijing buys more than 80% of Irans oil exports.

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