The State Council has decided to solicit opinions from public on a new petroleum price and fuel tax proposal, a senior official said yesterday. The pricing proposal calls for price strategy to be based on the international petrol price, but the extent of price adjustments will be limited.

One proposal is to define a maximum retail price based on the production price.

According to the proposal, the domestic petroleum price should be adjusted in line with international prices when the international crude oil price is below 80 dollar per barrel. If international price rises above 80 dollars, domestic prices should be fixed by subtracting processing profits. If the international price goes over 130 dollars, the domestic price should be fixed after deliberations.

Monthly cumulative price adjustments for domestic retail petroleum price would not be allowed to exceed 800 yuan (US$117) per ton, and no more than 1600 yuan (US$234) per ton over three months.

"The new proposal is aimed at preventing companies engaging in excessive speculation, and it will also reduce the sensitivity of the domestic petroleum price to severe international price fluctuations," said the official.

For more details, please read the complete story in Chinese. (http://paper.cnstock.com/paper_new/html/2008-11/28/content_66321804.htm)

(China.org.cn November 28, 2008)