CRI听力:New Gasoline Pricing System

The National Development and Reform Commission has been considering revamping the pricing mechanism of retail gasoline so that it better responds to market conditions.

Under the current pricing mechanism, the NDRC only considers adjusting retail gasoline prices if a basket of crude oil prices rises or falls by more than 4 percent within a period of 22 workdays. But the economic planning body has been considering shortening that period to 10 workdays.

Industry insider Han Xiaoping at says once the window is shortened to 10 days, it will keep domestic gas prices more in line with those on the international market and make it more difficult for speculators to predict prices and stockpile gas.

"Shortening that period will be better in line with the market trend. Consumers will soon see gasoline prices increase whenever there is an increase in the international market. And if international oil prices fall, consumers will soon see lower prices in the domestic market."

Zhou Dadi, head of the China Energy Research Society, suggests that the NDRC monitor gasoline prices and retain the right to intervene when prices become unreasonable.

"The country should keep monitoring domestic gasoline prices, so that when there are unreasonable prices, it has the authority to request an audit. For example, when an exorbitant profit is discovered in gasoline sales by some companies, the government should intervene immediately."

Some experts say a truly transparent, open and competitive market-based mechanism is required for determining gasoline prices. They also say a reform scheme for refined oil prices must be done with proper market timing, so that crude prices remain stable or drop.

Expert says the new mechanism will better reflect the changes of global crude prices in tune with market prices. He talks about the changes the new pricing scheme will bring to the market.

"Future domestic oil prices will be pegged to international crude oil prices. With the new pricing system, domestic gasoline prices will be a bit higher than they are now under[?in accordance with?] the same international crude oil price."

Media reports say China's two top oil giants are backing the reform of the oil-pricing system. PetroChina and Sinopec experienced huge losses in their refining businesses last year partly because China's domestic fuel-pricing system prevented them from fully passing on increased raw material costs to downstream oil consumers. PetroChina suffered an operating loss of 60.09 billion yuan, while Sinopec racked up a 34.8-billion-yuan loss.

Expert says so far, various factors, such as inflationary pressure and unstable international circumstances, have prevented the government from issuing a new oil-pricing mechanism.

For CRI, I am Zhang Wan.