China raises fuel prices by 16.7 percent

China raised fuel prices by 16.7 percent Thursday in order to cope with the rising cost of oil. The increase in regulated fuel prices is China's first hike in eight months and its sharpest ever one-off rise. The move eased global crude oil prices, which dropped $5. The 16.7 percent increase takes the pump rate for gasoline to about 75 U.S. cents a liter, still a quarter cheaper than in the United States and about one-third what UK motorists pay. Prices have doubled since 2003, but crude has more than quadrupled.

China's neighbors had been asking for this raise by scaling back subisidies, but the general thought was that Beijing was holding back on these measures for the sake of avoiding social unrest during the Olympic Games in August. China's rapid growth is considered one of the main reasons for oil's surge from $20 a barrel six years ago to the current record high of nearly $140.

[Source: AOL Money]

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