China dials back fuel price hikes in response to the Iran war's impact on oil prices, aiming to protect drivers from higher costs.
China has adjusted its planned fuel price hikes to reduce the financial burden on drivers, as energy costs escalate due to the Iran war. The initial increases of 2,205 yuan for petrol and 2,120 yuan for diesel per tonne have been halved to 1,160 yuan and 1,115 yuan respectively, effective Tuesday.
This marks China's fifth fuel price hike of the year and the largest so far, following a 20% jump in petrol prices since the conflict began. The Strait of Hormuz, a key oil shipping channel, has been affected, contributing to global oil price volatility.
Brent crude oil prices rose above $100 a barrel on Tuesday, amid conflicting reports on potential U.S.-Iran talks. China, which imports significant oil from Gulf countries, has seen long queues at petrol stations and some shortages over the weekend.
China's Oil Reserves and Import Strategy
China has built substantial oil reserves, with estimates around 900 million barrels, sourced partly from Iran and Saudi Arabia. In January and February, China increased crude imports by 16% compared to the previous year, according to its customs administration.
Beijing has ordered oil refineries to halt fuel exports temporarily to stabilize domestic prices. The National Development and Reform Commission implemented these price adjustments to mitigate the impact of rising international oil prices and ensure economic stability.
Regional Responses to Rising Fuel Costs
Other Asian countries are also addressing the energy crisis. In the Philippines, government employees work four days a week, while Sri Lanka has made Wednesdays a holiday for public institutions to conserve fuel.
Thailand and Vietnam encourage remote work, and Thai civil servants are suspending overseas trips and using energy-saving measures like wearing short-sleeve shirts. In Japan, gasoline prices hit a record high of 191 yen per liter, an 18% increase from the previous week.
South Korea's President Lee Jae Myung canceled a trip to China to focus on domestic responses, including reducing public vehicle use, as the country relies heavily on oil through the Strait of Hormuz.
