China will raise the retail prices of gasoline by 390 yuan (62 U.S. dollars) per tonne and diesel by 370 yuan per tonne starting Friday, the country's top economic planner said Thursday.
The move, which followed three consecutive cuts from May to July, marks the third such increase this year, due to a rebound in international crude oil prices, state-run Xinhua news agency reported.
The benchmark retail price of gasoline will be lifted by 0.29 yuan per liter and diesel by 0.32 yuan per liter, the National Development and Reform Commission (NDRC) said in a statement on its website.
Under China's oil product pricing system introduced in 2009, domestic fuel prices may be adjusted when international crude oil prices change by more than 4 percent over 22 working days.
Although oil consumption has remained weak amid a global economic slump, export bans on Iranian oil and intensifying conflicts in the oil-rich Middle East have driven up crude prices over the past month, analysts said.
Unlike previous hikes, the government did not delay the price increase this time because of significantly reduced inflationary pressure and the need to ease refineries' losses, said Chen Qing, an analyst with Zhuochuang Information Services, a commodity information service provider.
But the new price hike will nevertheless drive up domestic production costs, Chen said, estimating that the hike will push up the CPI by about 0.01 percentage point.
The logistics sector will be affected the most. As transportation fees account for 70 percent of total costs in the logistics sector, the sector will see a 1.79-percent increase in costs after the hike, according to Chen.