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China slashes fuel price hikes as global oil tensions rise
China has reduced its latest fuel price increases by nearly half in response to soaring energy costs linked to the Iran conflict, which has disrupted oil shipments through the Strait of Hormuz.
Price adjustments announced
The National Development and Reform Commission (NDRC) revealed on Monday that planned hikes for gasoline and diesel-originally set at 2,205 yuan (£239; $320) and 2,120 yuan per tonne, respectively-would be cut to 1,160 yuan and 1,115 yuan. The revised rates took effect on Tuesday.
This marks the fifth and largest fuel price adjustment in China this year, even after the reduction. Domestic petrol prices have climbed roughly 20% since the start of the Iran conflict, which has effectively closed one of the world's busiest oil transit routes.
Domestic supply pressures
Over the weekend, long queues formed at petrol stations across multiple Chinese cities, with some locations posting notices of fuel shortages. China, home to more than 300 million drivers, relies heavily on Gulf nations for its oil imports.
In an effort to stabilize domestic supply, authorities reportedly instructed refineries to halt fuel exports temporarily. The government has not responded to requests for comment on the measure.
"Temporary regulatory measures have been adopted to mitigate the impact of abnormal increases in international oil prices, ease the burden on downstream users, and ensure stable economic operations and public welfare,"
China's state planner
Global oil market volatility
Brent crude prices surged past $100 a barrel on Tuesday, reversing a sharp decline the previous day amid conflicting reports about potential US-Iran negotiations. China, which has capitalized on lower crude prices in recent years, has built one of the world's largest oil reserves, estimated at around 900 million barrels-equivalent to nearly three months of imports.
Data from China's customs administration shows the country increased its crude purchases by 16% in January and February compared to the same period last year. Iran, whose oil is under US sanctions, remains a key supplier, accounting for over 80% of its exports to China.
Regional responses to energy crisis
Other Asian nations are also implementing measures to offset rising fuel costs. In the Philippines, government employees will shift to a four-day workweek, while Sri Lanka has declared Wednesdays a public holiday for institutions. Thailand and Vietnam have urged citizens to work from home to conserve fuel.
Japan and South Korea, both heavily dependent on oil transiting the Strait of Hormuz, are facing acute pressure. Japan's gasoline prices hit a record high last week, rising 18% in just seven days. South Korean President Lee Jae Myung canceled plans to attend an international forum in China, opting to remain in the country to oversee economic responses.
In Sri Lanka, private bus operators went on strike Monday, demanding fare adjustments to cover soaring fuel expenses. Meanwhile, over 20 transport groups in the Philippines have announced a two-day strike starting March 26 to protest rising costs.
