China will raise the prices of gasoline, diesel and aviation fuel by 500 yuan (67 dollars) per ton, China's economic planner announced on Wednesday, according to state media.
The nearly 10 percent increase, which takes effect November 1, was made to narrow the gap between soaring international crude and domestic oil prices, the official Xinhua news agency said, citing the National Development and Reform Commission (NDRC).
Price controls in China often result in oil being cheaper domestically than internationally, a situation that is especially exacerbated with large upward swings on the global market.
Fuel shortages have been reported at petrol stations throughout China as the cost of oil on the domestic market has lagged behind record global prices, prompting refiners to slow deliveries.
"If the crude price is 80 US dollars per barrel, domestic refineries will lose 600 yuan for each ton of crude they process, and 1,000 yuan for each ton of oil they produce," Liu Zhenqiu, vice director of the NDRC's price department, told Xinhua.
China National Petroleum Corporation and China Petroleum and Chemical Corporation had ordered their refineries to work at nearly full power to help maintain the stability of the domestic market, according to Xinhua.
Demand for energy in China, the world's second-largest oil importer, has rocketed as a result of explosive economic growth that has been in double digits for four consecutive years.
The price of New York crude struck a record high 94 dollars a barrel in London on Wednesday.
Chinese demand has been identified as being at least partly responsible for currently high oil prices.
The government will increase the price of natural gas for cars and industrial production, and prices that may be affected are air passenger services, rail cargo and highway transport, the NDRC said.
Public transportation and rail fares will not go up, and the government will give taxi drivers subsidies, the NDRC said.
