The country’s top economic planner, National Development and Reform Commission (NDRC), announced on Monday that it would raise regulated ceiling prices for retail gasoline and diesel, but at roughly half the level dictated by its standard pricing formula. The decision is aimed at cushioning consumers and businesses from the sharp rise in crude prices triggered by the U.S.-Israeli war with Iran.
Under the revised adjustment, gasoline prices will increase by 1,160 yuan ($167.93) per metric ton, while diesel will rise by 1,115 yuan per ton, effective from midnight. Despite being moderated, the increase still marks the steepest adjustment in about a decade and pushes domestic fuel price caps close to levels last seen in 2022, following the Russia's invasion of Ukraine.
China’s fuel pricing system typically reviews retail prices every 10 working days, aligning them with global crude movements while factoring in refining costs, taxes, distribution, and margins. Based on this mechanism, prices would have risen much more sharply—by 2,205 yuan per ton for gasoline and 2,120 yuan for diesel—without government intervention.
Authorities said the temporary cap was introduced to “ease the burden on downstream users” and maintain economic and social stability, signaling concern over inflationary pressures and industrial costs.
Global oil markets have surged amid escalating tensions in the Middle East. Prices climbed further on Monday after Iran’s Revolutionary Guards warned of potential strikes on Israeli infrastructure and facilities supporting U.S. bases in the region. Benchmark Brent crude rose to $113.76 per barrel, while West Texas Intermediate reached $101.32, both posting significant gains.
The capped increase underscores Beijing’s balancing act—allowing domestic prices to reflect global trends while shielding its economy from the full shock of geopolitical-driven energy volatility.