On 26 October China increased retail petrol and diesel prices by Rmb230 and Rmb220 per tonne, respectively, said the National Development and Reform Commission on its website.

The price adjustment will increase the benchmark price of petrol to Rmb7,420 per tonne and that of diesel to Rmb6,680 per tonne.

The NDRC said that the price rise was made in response to recent changes in international crude oil prices, which had jumped more than 4 per cent to more than US$80 per barrel since late September. It was the first price increase since a rise of about 4 per cent in April, and it reverses a 3 per cent cut enacted in June.

China’s oil pricing mechanism links domestic oil prices to international oil prices. Under the current system the central government is able to revise prices when crude oil costs change more than 4 per cent over 22 straight working days. However, it remains at the government’s discretion whether it acts on such changes and refiners complain that the mechanism is too simplistic and does not fully reflect changes in the international market.