For many years, the Chinese government has held gas prices down to avoid hurting economic growth in the country. The prices are regulated by the National Development and Reform Commission. Prices jumped 6-7 percent a month ago and 3-5 percent in March.
Increasing fuel prices may hurt overall sales of new cars but it may also stimulate demand for more efficient cars. This could help to address some of the severe pollution problems that afflict China's big cities.