China is studying a system that would allow its three major oil companies to independently set the prices of refined oil products when global oil prices are below $130 a barrel, the Shanghai Securities News reported Friday, citing a government researcher. China may also incorporate “relatively cheaper” West Texas Intermediate-the US light, sweet benchmark, which is traded on the New York Mercantile Exchange-into the crude basket it tracks, the newspaper said, citing Jiang Xinmin, deputy director at the Energy Research Institute of the National Development and Reform Commission.
However, it isn’t clear whether WTI will replace one of the three grades it currently references-rent, Dubai and Cinta-or an addition, he said, according to the newspaper.
Under the current fuel pricing mechanism, introduced in 2009, the NDRC, China’s top economic planner, may adjust the retail prices of gasoline and diesel when the moving average of the basket of international crude grades changes more than 4 percent within the 22-day period.
China raised retail gasoline and diesel prices for the second time this year on Tuesday due to high international oil prices, which rose as much as 11 percent since the last adjustment.-By Wayne Ma