Energy Finance

An 18% jump in China’s state-controlled fuel prices will affect its consumers at gas stations and grocery stores, but some analysts say the hike is unlikely to make much of a dent in the country’s demand for oil.

China’s government has been paying billions of dollars in subsidies to its two state-owned refiners, PetroChina and Sinopec, to keep prices low. In November, it hiked fuel prices by about 11% and kept them frozen at that level to avoid adding to inflation, which has reached a 12-year high this year.

The recent hike raised the gasoline price by 1,000 yuan ($145) per ton to 6,980 yuan ($1,015), more than 16%, and diesel to 6,520 yuan ($949) per ton, 18%. Aviation kerosene rose by 1,500 yuan ($218) per ton to 7,450 yuan ($1,084).

Chinese oil imports rose to 59.8 million barrels in the first quarter, up 10%  from a year earlier. Gasoline imports rose to 554,000 tons in first quarter, while diesel imports rose to 2.9 million tons.

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