• 5 hours UK On Track To Approve Construction of “Mini” Nuclear Reactors
  • 9 hours LNG Glut To Continue Into 2020s, IEA Says
  • 11 hours Oil Nears $52 With Record OPEC Deal Compliance
  • 14 hours Saudi Aramco CEO Affirms IPO On Track For H2 2018
  • 16 hours Canadia Ltd. Returns To Sudan For First Time Since Oil Price Crash
  • 17 hours Syrian Rebel Group Takes Over Oil Field From IS
  • 3 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 4 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 4 days New Video Game Targets Oil Infrastructure
  • 4 days Shell Restarts Bonny Light Exports
  • 4 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 4 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 4 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 5 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 5 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 5 days Rosneft Signs $400M Deal With Kurdistan
  • 5 days Kinder Morgan Warns About Trans Mountain Delays
  • 5 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 5 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 6 days Conflicting News Spurs Doubt On Aramco IPO
  • 6 days Exxon Starts Production At New Refinery In Texas
  • 6 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 7 days China To Take 5% Of Rosneft’s Output In New Deal
  • 7 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 7 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 7 days VW Fails To Secure Critical Commodity For EVs
  • 7 days Enbridge Pipeline Expansion Finally Approved
  • 7 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 7 days OPEC Oil Deal Compliance Falls To 86%

China Drops Consumer Fuel Discount To Fight Pollution

China Drops Consumer Fuel Discount To Fight Pollution

At least for the time being, the Chinese government is dropping its “price adjustment,” or discount, for retail gasoline and diesel fuel as it struggles to combat the country’s growing pollution problem.

The National Development and Reform Commission (NDRC) issued a statement Tuesday saying, “Giving full play to the leverage effect of refined oil prices is an important way to promote energy conservation and tackle air pollution.”

Since the spring of 2013, the NDRC has been adjusting automotive fuel prices for consumers whenever the average global price of oil leads to changes the prices of gasoline and diesel by more than 50 yuan (about $7.70) per metric ton within 10 working days.

Because crude prices have fallen in the past two weeks, China had been expected to announce a reduction in the retail cost of these fuels on Tuesday. Instead it announced that the price-adjustment program would be suspended as it grapples to reduce the smog that chokes its cities. “Emissions from automobiles are one of the major reasons for air pollution,” the NDRC said.

Related: $30 Oil Will Accelerate Much Needed Rebound

“When the price of oil is low,” the statement said, “maintaining a fundamentally stable price for refined products helps restrain the too-fast growth in oil consumption and energy structural change, spur environmental protection, and improve air quality.”

The pollution has become so bad that on Dec. 8, Beijing issued a red alert on behalf of its 23 million inhabitants that shut down factories in the capital region, forced millions of vehicles off the roads and urged schools to close. It was the second time this month that the city was beset by pea-soup smog.

“It is history – this is a precedent set,” Ma Jun, director of the Institute of Public an Environmental Affairs in Beijing, told The Guardian at the time. “This is extremely important to stop children from being exposed to such a high level of pollution.”

Related: Fed Rate Hike Bad Timing for Crude Oil

Smog levels in the capital area were elevated the previous week as well, and the government faced strong criticism for passing up the opportunity to order a red alert then. Smog levels in some areas around Beijing soared to 40 times the limits set by the World Health Organization. Levels of microscopic particulate matter carbon exhaust exceeded 900 micrograms per cubic meter.

The problem is so bad that researchers at the University of California at Berkeley say this pollution is killing 4,000 people in China each day, or fully one-sixth the the country’s premature deaths. “It’s a little hard to wrap your mind around the numbers,” said the report’s lead author, Robert Rhode.

Related: Gazprom Rapidly Losing Grip On European Markets

China is targeting automotive fuel as the country's heavy manufacturing sector is slowing down and, as a result, motor vehicles are generating a higher proportion of pollutants, according to the International Energy Agency (IEA), the Paris-based organization that advises 29 developed nations on energy policy.

In its monthly Oil Market Report on Dec. 11, the IEA said gasoline demand in China rose by 10.4 percent from January to October 2015 over the same period in 2014. At the same time, it said, demand for diesel and fuel oil was weak. Therefore, the agency said, it appears that “the Chinese economy is undergoing a structural transformation – shifting from heavy manufacturing/exports towards a more domestically focused economy.”

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News