In brief
China has announced a reduction in planned fuel price increases as part of efforts to alleviate the financial strain on motorists during a period of surging energy costs due to the ongoing conflict in Iran. The adjustments will see price hikes nearly halved, highlighting the government's response to public outcry and growing queues at petrol stations. This measure comes as global oil prices continue to fluctuate amid geopolitical tensions, raising questions about long-term implications for China's oil supply and pricing strategies.
China has dialled back on planned fuel price hikes in a bid to reduce the burden on drivers, as energy costs surge amid the Iran war.
The local price of petrol has jumped by about 20% since the start of the conflict, which has seen Iran effectively close one of the world's busiest oil shipping channels, the Strait of Hormuz.
Gasoline and diesel prices were initially set to rise by 2,205 yuan (£239; $320) and 2,120 yuan per tonne respectively – but after government adjustments, the increases will be nearly halved to 1,160 yuan and 1,115 yuan, starting Tuesday.
More than 300 million people in China drive cars that run on petrol or diesel, with Gulf countries a major source of the country's oil.
Long queues of cars had formed outside petrol stations in multiple Chinese cities over the weekend, with some stations having to post notices that they had run out of fuel.
The latest price hike was the country's fifth and largest of the year so far - even with the reduction.
On Tuesday, the price of Brent crude oil jumped above $100 a barrel - a day after prices plunged, as conflicting accounts of potential talks between the US and Iran emerged.
Beijing has over the years taken advantage of lower crude prices and the abundance of supply from Gulf states to build one of the world's biggest oil reserves. According to Saxo Bank's head of commodity strategy, Ole Hansen, estimates show China has built up reserves of around 900 million barrels - just under three months' worth of imports.
Despite its reserves, Beijing has shown signs of caution to manage its supplies in the short-term.
Authorities in China reportedly ordered its oil refineries to temporarily cease fuel exports, in an attempt to keep domestic prices under control. China's government did not respond to queries on the matter.
Barrels from Saudi Arabia and Iran account for more than 10% of its imports each, according to the US Energy Information Administration.
In a statement, China's state planner said, 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, temporary regulatory measures have been adopted.
The price hikes were implemented by the National Development and Reform Commission (NDRC), which reviews petrol and diesel prices every 10 days and adjusts based on global prices of crude oil.
Other countries across Asia have also implemented a range of cost-cutting measures to help cushion the blow of soaring global energy prices. Government employees in the Philippines have been ordered to work four days a week, and Sri Lanka has declared every Wednesday a holiday for public institutions.
Japan and South Korea have been particularly affected by the Iran conflict, as they are heavily dependent on oil and gas that would normally pass through the Strait of Hormuz, leading to record high gasoline prices.
As governments across Asia cope with rising fuel costs, public protests and strikes have erupted in some countries, demanding action against the surging prices.
