Like it or not, China's refined oil prices will change along with international crude oil price fluctuations, just like what happens in the United States where consumers have no idea what their fuel prices will be the next day. I also need to remind consumers that last year when the crude oil price in New York soared above $140 a barrel, the government capped fuel prices at a relatively low level, which effectively curbed inflation and put consumers' interests ahead of oil producers.

Consumers should get used to frequent fuel price readjustments in the future under the new pricing scheme adopted this May.

OP-ED: An Ambiguity

By YAO BIN

Energy is of strategic importance to sustainable development. None of the world's major energy-consuming economies can afford to give up regulating the energy market. This regulation consists of price controls, buildup of state reserves and monopolized sales. From this perspective, the Chinese Government's existing energy policy based on price controls conforms to national development strategies and is conducive to energy and economic security. However, this doesn't necessarily mean the negative impact of the interference can be neglected.

Though China's oil imports and its dependence on imported oil are increasing, the country is still able to feed 50 percent of its demand for crude oil. Domestic oil deposits, as well as their state-owned exploiters, are all obliged to serve customers at home who are struggling against a sweeping economic slowdown. How can their refined products be priced much higher only in the excuse of "international oil price fluctuation?"

In fact, prices of crude traded in the international market are not the only factor affecting domestic fuel prices. According to the currently effective fuel pricing scheme, any adjustment will take into consideration international crude oil prices, taxes and profit margins for refiners. So, if domestic refiners can slash refining costs and concede some profits to offset price hikes in the international market, domestic fuel prices may be able to remain steady or go up less frequently and remarkably.

Chinese oil companies' operational costs do have room for reduction. Take PetroChina Co., the larger of China's two major oil producers, for example. PetroChina is now China and Asia's most profitable company, with annual net profit topping $15 billion. However, the company, with more than 1 million employees, is disproportionately bigger than many of its overseas counterparts such as Exxon Mobil Corp., the U.S. oil giant with only 80,000 workers worldwide. The only reason behind overstaffed and inefficient PetroChina's huge profit is that the state-owned monopoly company is allowed to maintain excessively high profit margins in oil exploitation and refining. The same problems and profit model are also features of Sinopec Corp., China's another state-owned oil company and Asia's largest refiner.

Only after the abovementioned problems are fully addressed, can efforts to synchronize increases of domestic fuel prices and international crude oil prices succeed and no longer cause complaints from the general public.