Steep rise in Chinese gas prices, no large profit for refiners

The U.S. is not the only country struggling with high gas prices. China raised its retail gasoline and diesel prices on Wednesday to take them 15 percent higher so far this year, according to Reuters. While in the U.S. fuel refiners are making record profits, Chinese refiners are operating at a loss, even after the price hikes. Gasoline and diesel prices increased 9.6 and 11.1 percent respectively. Even though the increase is steep, China's capped fuel prices actually lag the rally of crude oil. The reactions of analysts are mixed with respect to the possible effect the rise will have on consumer demand. Even with the increased prices, China's demand for fuel is projected to increase by about 6 percent in 2006.
[Source: Reuters]