China has reduced planned increases in fuel prices as global energy costs rise amid the Iran conflict, aiming to ease pressure on drivers while managing domestic supply concerns.
The price of petrol in China has already climbed about 20% since the conflict began, as disruptions linked to Iran have affected shipments through the Strait of Hormuz. The route is one of the world’s busiest channels for oil transport, and its effective closure has tightened supply.
Reduced Price Increase After Government Adjustment
Fuel prices were initially set to rise by 2,205 yuan per tonne for gasoline and 2,120 yuan for diesel. After adjustments, authorities lowered the increases to 1,160 yuan and 1,115 yuan respectively, with the changes taking effect on Tuesday.
China’s state planner said the measures were introduced to mitigate the impact of rising international oil prices and to support economic stability and public welfare.
The adjustments were implemented by the National Development and Reform Commission, which reviews fuel prices every 10 days based on global crude oil trends.
Supply Pressure And Public Response
More than 300 million drivers in China rely on petrol and diesel vehicles, many of which depend on imports from Gulf countries. Reports from multiple cities showed long queues forming at petrol stations over the weekend, with some outlets running out of fuel.
The latest increase marks the fifth fuel price adjustment this year and the largest so far, even after the reduction.
Global oil markets have shown volatility during the conflict. Brent crude prices rose above $100 per barrel on Tuesday after fluctuating earlier in the week due to mixed signals around potential U.S.-Iran talks.
China’s Oil Reserves And Import Strategy
China has built substantial oil reserves over time, taking advantage of lower prices and steady supply from Gulf exporters. According to Saxo Bank’s head of commodity strategy, Ole Hansen, estimates suggest the country holds around 900 million barrels, equivalent to nearly three months of imports.
Data cited by Chinese state media, referencing Columbia University, put China’s petrol reserves at approximately 1.4 billion barrels.
Customs data shows that China increased crude purchases by 16% in January and February compared with the same period a year earlier. Iran, despite U.S. sanctions, remains a major supplier, with reports indicating China buys more than 80% of Iran’s oil exports.
Imports from Saudi Arabia and Iran each account for more than 10% of China’s total oil supply, according to the US Energy Information Administration.
Short-Term Measures To Manage Supply
Despite its reserves, China has taken steps to manage domestic supply. Authorities have reportedly instructed refineries to temporarily halt fuel exports to stabilize local prices, although the government has not publicly confirmed the directive.
These actions reflect caution in maintaining supply levels as global conditions remain uncertain.
Regional Impact And Policy Responses Across Asia
Other Asian countries have introduced measures to address rising fuel costs. In the Philippines, government employees have been directed to work four days a week. Sri Lanka has declared Wednesdays as a public holiday for state institutions, while Thailand and Vietnam have encouraged remote work to reduce fuel consumption.
Thai officials have also been instructed to suspend overseas travel, wear short-sleeve shirts to reduce energy use, and use stairs instead of elevators.
Sri Lanka has seen transport disruptions, with private bus operators going on strike over fare adjustments tied to fuel costs. In the Philippines, more than 20 transport groups have announced a strike scheduled for March 26 to 27.
Rising Costs In Japan And South Korea
Countries heavily dependent on energy imports through the Strait of Hormuz are also facing pressure. In Japan, gasoline prices reached a record high, with average retail prices rising to 191 yen per litre on Monday, an 18% increase from the previous week.
In South Korea, President Lee Jae Myung said public institutions would reduce the use of passenger vehicles. His office also announced that he had canceled plans to attend an international forum in China to focus on managing the domestic economic response.
Featured image credits: Wikimedia Commons
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