The price hikes were within market expectations and benefited domestic trading houses who had boosted tank storage that was nearly empty in March and April.
Increased stocking activity will help absorb rising refinery throughput amid slowing product exports and decelerating fuel demand.
NDRTC lifted retail ceiling prices for gasoline and gasoil by Yuan 120/mt ($2/b) and Yuan 110/mt, respectively.
China adjusts retail fuel prices only when benchmark global crude prices move by more than Yuan 50/mt over a 10-day period and remain above a floor price of $40/b.
The last time NDRC changed retail ceiling prices was on March 18, when it cut gasoline prices by Yuan 1,015/mt and gasoil by Yuan 975/mt, to account for a slump in global oil prices. Price adjustments have been suspended since due to low and stable oil prices.
Over the 10 working days from June 11-24, the price basket referenced by NDRC has moved above $40/b and fluctuated by more than Yuan 50/mt.
The basket of international crudes includes ICE Brent, NYMEX WTI and DME Oman, weighted as per China’s crude import slate, according to Beijing-based industry sources.
“Buying from trading houses has been strong, which helps offset our stock pressure,” a Sinopec refiner in eastern China said.
China processed 57.9 million mt of crude in May, up 8.2% year on year, latest data from the National Statistics Bureau showed.
China’s diesel demand has slowed as heavy rain and floods in many parts of the country have halted construction and transportation work, while a fishing ban is still in place. Gasoline demand has been marginally stronger.
“The price hikes encourage state-owned refineries to sustain or even further lift throughput amid widening refining margins,” a Shandong-based Sinopec refiner said.