(March 19th 2012)
Fuel prices…
As they rise, we see the impact it has on an entire country’s economy. In China (the world’s 2nd leading
economy) the increase comes as global oil prices rise due to stronger global
growth prospects and tensions with key supplier Iran. The last increase puts
the price of gasoline in China at about $4.42 a gallon, but just like here the
prices vary locally.
The basket
of crude-oil types that China keeps has risen by 11% over 22 days as of Friday,
according to energy consultants C1 Energy. To help, the government will
continue to offer oil subsidies if international oil prices increase, according
to the state-run Xinhua news agency.
In addition, China has made other moves to allow energy-price increases into
the market as it looks to make its economy more energy efficient.
The report
concludes by saying, in December, China will test natural-gas-price reforms in
select locations where the price will be tied to markets rather than kept
artificially low. This could be a
very good idea, and I will be curious to see their results.
~Chet
Matsuura
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