China will subsidize its oil refiners and suspend the raising of domestic fuel prices if global oil prices surpass 130 U.S. dollars a barrel, according to an official notice made public on Wednesday.
The move will safeguard the stable supply of fuels, alleviate the burden on downstream enterprises and consumers, and lower the operating costs of the real economy, said the notice released jointly by the Ministry of Finance and the National Development and Reform Commission.
The policy will initially last for two months, while further notices will be issued if oil prices consistently exceed 130 U.S. dollars, the authorities said.
Under the current pricing mechanism, China will adjust the domestic prices of refined oil products when international crude prices translate into a change of more than 50 yuan (about 7.46 U.S. dollars) per tonne for gasoline and diesel for a period of 10 working days. However, it will not do so if the international prices go below the floor of 40 U.S. dollars or above the ceiling of 130 U.S. dollars a barrel.