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China hikes fuel prices for second month

The latest hike reflected changes in international crude prices/AFP-File

SHANGHAI, Sep 11 – China on Tuesday hiked government-set fuel prices for the second month in a row with shares in listed oil giants falling despite expectations the move would narrow their losses.

State planner the National Development and Reform Commission said late Monday it would raise retail prices for petrol and diesel.

The benchmark price for petrol rose 6.6 percent to 8,840 yuan ($1,403) per tonne and diesel rose 7.2 percent to 8,020 yuan per tonne, according to a statement.

Shares in Chinese oil giants Sinopec and PetroChina were down in Shanghai trading on Tuesday despite hopes the move would pare losses in their refining business.

The companies say low government-set retail prices combined with high crude costs are hurting their business.

Sinopec recorded a loss of 18.5 billion yuan for its refining business alone in the first half of this year, while PetroChina reported a refining loss of 23.3 billion yuan in the period, according to company statements.

Sinopec shares were down 1.29 percent to 6.14 yuan while PetroChina was down 0.67 percent to 8.93 yuan around midday in Shanghai trading.

The latest hike reflected changes in international crude prices.

They were mixed in Hong Kong, where both companies are also listed, with Sinopec down 0.56 percent to HK$ 7.04 ($0.91) and PetroChina up 0.96 percent to HK$9.46 by midday.

The latest hike reflected changes in international crude prices, which have climbed due to hopes for a fresh round of economic stimulus policies by the United States and Europe, the commission said.

The commission can adjust fuel prices when international oil prices move by more than four percent over a 22-working day period. China last hiked fuel prices on August 10.

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