China raises gas, diesel prices 10% to cut demand

Discussion in 'Economics' started by ASusilovic, Nov 1, 2007.

  1. One of the biggest forces behind the near-quadrupling of oil prices this decade has been voracious fuel demand in China and other developing nations. But with crude closing in on $100 a barrel, shortages and price spikes are sparking economic and social tensions from Beijing to Tehran. That stress could signal a turning point in the long-running energy boom.

    Yesterday, China announced an almost 10% increase in domestic gasoline and diesel prices, in a dramatic move to tamp down demand. China's price move, reducing its need for subsidies to oil firms, was seen by analysts as an attempt by authorities to cope with an energy market run amok. Supply shortfalls have been triggered by the country's combination of subsidized energy prices and breakneck economic growth, which has led to insatiable fuel demand.

    If you can´t hurt them with currency exchange, hurt them with commodity prices !
  2. I find it strange that a country that embraces free market capitalism also sets fuel prices.