**The price of finished gasoline has gone up again – what’s the point of that?

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**Notice from the National Development and Reform Commission on Raising the Prices of Refined Petroleum Products To the Development and Reform Commissions and Price Bureaus of all provinces, autonomous regions, and municipalities directly under the Central Government, as well as the Price Bureau of the Xinjiang Production and Construction Corps, China National Petroleum Corporation, Sinopec Group Corporation, and China National Offshore Oil Corporation: In accordance with the improved mechanism for setting prices of refined petroleum products, and taking into account recent changes in international oil prices, it has been decided to raise the prices of such products. The relevant information regarding this matter is as follows: First, the supply prices of gasoline and diesel (standard grade; the same below) provided by enterprises engaged in the production and distribution of refined petroleum products for use by the military, as well as for the Xinjiang Production and Construction Corps and **, have been increased by 600 yuan per ton. The adjusted supply prices for gasoline and diesel are 6,730 yuan per ton and 5,990 yuan per ton respectively. The prices of other refined petroleum products are adjusted accordingly. The adjusted prices of refined oil reference standards are shown in Appendix 1. The price of non-standard products is determined by the refined oil production and operation enterprises in accordance with **the specified quality ratios. II. The maximum supply prices for gasoline and diesel to specialized users such as the railway industry will be increased by the same amount. The adjusted maximum supply prices per ton for standard gasoline and diesel are 7,130 yuan and 6,390 yuan respectively. The maximum supply price for non-standard products is determined by the refined oil production and operation enterprises in accordance with the **specified quality ratios. Among them, the supply prices for gasoline and diesel intended for forestry and reclamation purposes are temporarily set at the same levels as those for oil supplied to the military. For qualified private wholesale enterprises, the maximum supply price is determined by subtracting 400 yuan from the maximum retail price. When the retail price in the market decreases, the supply price to private wholesale enterprises should also be reduced accordingly, ensuring that the price difference remains at least 400 yuan. The specific supply price can be determined through negotiation between the supplier and the buyer, as long as it does not exceed the maximum supply price. III. The maximum retail prices of gasoline and diesel will be increased by the same amount in various regions. The adjusted maximum retail prices for gasoline and diesel in various provinces (regions, municipalities) and central cities are shown in Appendix 2. The price regulatory authorities of various provinces (regions, municipalities) adjust the maximum retail prices for non-standard gasoline and diesel products in accordance with the specified quality ratios. Retailers of refined oil products may set their own specific retail prices, as long as these do not exceed the maximum retail price. IV. The maximum wholesale prices for gasoline and diesel are increased by the same amount. Where the contract stipulates that delivery shall be made by the supplier to the retail business, the maximum wholesale price is determined by deducting 300 yuan from the maximum retail price ； Where the contract does not specify delivery, the maximum wholesale price shall be determined by the price regulatory authorities of each province (region, municipality) on the basis of 300 yuan, taking into account transportation and handling costs. When the retail price in the market decreases, the wholesale price should also decrease accordingly, ensuring that the price difference between wholesale and retail remains at least 300 yuan. The price regulatory authorities of each province (region, municipality) set the maximum wholesale prices for non-standard products in accordance with the specified quality ratios. Finished oil wholesale companies can negotiate with retail companies to determine specific wholesale prices, as long as these prices do not exceed the maximum wholesale price. V. The maximum ex-factory price for liquefied gas is determined based on a price ratio of 0.92:1 compared to the supply price of No. 90 gasoline for use by the military and other agencies; the supplier and buyer may negotiate to determine the specific price as long as it does not exceed the maximum ex-factory price. VI. The adjusted prices shall take effect at 00:00 on June 30, 2009. VII. CNPC and Sinopec Group should ensure smooth coordination between the production and transportation of refined oil products in order to guarantee market supply. At the same time, it is necessary to urge the affiliated enterprises to strictly implement the **price policy. VIII. Price regulatory authorities at all levels should strengthen price supervision and inspection, crack down severely on various price-related illegal activities, and effectively maintain stability in the refined oil market. At the same time, it is necessary to strengthen the monitoring of the dynamics and prices in the refined oil market; in case of any abnormalities, reports should be made promptly, and cooperation should be provided with relevant departments to take appropriate measures. IX. The price regulation authorities of various provinces (municipalities, districts), as well as CNPC and Sinopec Group, are required to submit reports by 18:00 on June 30 regarding the implementation of the price adjustment plans, market prices, and any existing issues to the Price Department of our commission (fax number: 010-68502194). Could any experienced colleague tell me what the purpose of this action is? Could it have an impact on those of us in the coal chemical industry?