China Eases Planned Increase to Gas Prices for 300 Million Drivers

China Softens Gasoline Price Increase

Facing sharply rising energy costs, China moved on Monday to ease the impact on the more than 300 million drivers who still rely on gasoline-powered cars. In a country where about half of new cars are electric vehicles or hybrids, the government said it would “reduce the burden” on motorists by lowering a planned increase in retail gasoline prices.

The National Development and Reform Commission, China’s top economic planning agency, said that starting Tuesday, gasoline would be priced at an average of $4.70 a gallon. That is up from $4.20 a gallon, but below the previously planned $5.10 a gallon.

Even with the lower price cap, gasoline prices in China have risen about 20 percent since the war in Iran began. The commission normally adjusts fuel prices every 10 days to track changes in global oil prices, but the recent surge in energy costs has made what is usually a formula-based process more economically and politically sensitive.

Unusual Government Intervention

The decision surprised oil analysts who closely follow China’s energy policies. Muyu Xu, a senior oil analyst at Kpler, said the move suggested that Beijing was deeply concerned about inflationary pressure and the affordability of fuel for consumers, especially amid broader macroeconomic headwinds.

The 40-cent increase that was ultimately approved was still the largest single rise in retail gasoline prices since the commission began making 10-day adjustments in 2013. Xu said she believed it was the first time the agency had stepped in to temper an increase in this way.

The move underscores the pressure on Chinese policymakers as higher global oil prices feed into everyday costs, even as the country’s transition toward electric and hybrid vehicles accelerates.