China announced its largest retail fuel price cap increase in four years on Monday, responding to soaring global oil prices triggered by the escalating U.S.–Israel conflict with Iran.
The country raised regulated ceilings for gasoline and diesel by 695 yuan and 670 yuan per metric ton, respectively, according to the National Development and Reform Commission.
The new limits take effect Tuesday, marking the sharpest adjustment since March 2022 and replacing the previous price update issued on February 24.
Global oil markets surged last week, with Brent crude jumping 27% and U.S. West Texas Intermediate rising 35.6%, as geopolitical tensions disrupted energy supply expectations.
Authorities also instructed Chinese refiners to halt fuel exports and cancel pending shipments, aiming to preserve domestic supply while refinery operations face pressure from the conflict.
China’s state planner reviews fuel pricing every 10 working days, applying uniform national adjustments while considering regional benchmark variations.
The pricing formula reflects international crude trends, alongside refining costs, taxes, distribution expenses, and standard profit margins.
Under China’s price mechanism, increases are usually limited when crude exceeds $130 per barrel, while calculations assume a $40 floor when global prices fall sharply.
