China Raises Gasoline and Diesel Prices at the Pump

As a result of rising crude oil prices, and taking advantage of a drop in the country’s inflation rate in May, China raised gasoline and diesel prices for the first time in eight months this Friday. As of midnight, gasoline prices were raised by 0.8 yuan (12 cents), and diesel 0.92 yuan (13 cents), per liter. This brings gasoline prices to 6.2 yuan per liter in China, or approximately $3.47 per gallon. In most parts of the United States, gasoline now sells for $4.00 or more per gallon. However, taxes account for 11 percent of the retail price, so the net price per gallon in the U.S. is approximately $3.56 per gallon.

It appears that the Chinese government took advantage of the drop in inflation from 8.3 percent in March to 7.7 percent in May to bring energy prices in the country more in line with global prices. At the same time, China announced that it will raise electricity charges for commercial units as of July 1.

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