China has dialled back on planned fuel price hikes in a bid to reduce the burden on drivers, as energy costs surge amid the Iran war. The local price of petrol has jumped by about 20% since the start of the conflict, which has seen Iran effectively close one of the world's busiest oil shipping channels, the Strait of Hormuz.
Gasoline and diesel prices were initially set to rise by 2,205 yuan (£239; $320) and 2,120 yuan per tonne respectively – but after government adjustments, the increases will be nearly halved to 1,160 yuan and 1,115 yuan, starting Tuesday. More than 300 million people in China drive cars that run on petrol or diesel, with Gulf countries a major source of the country's oil.
Long queues of cars had formed outside petrol stations in multiple Chinese cities over the weekend, with some stations having to post notices that they had run out of fuel.
The latest price hike was the country's fifth and largest of the year so far - even with the reduction. On Tuesday, the price of Brent crude oil jumped above $100 a barrel - a day after prices plunged, as conflicting accounts of potential talks between US and Iran emerged.
Beijing has over the years taken advantage of lower crude prices and the abundance of supply from Gulf states to build one of the world's biggest oil reserves. Estimates show China has built up reserves of around 900 million barrels - just under three months' worth of imports. Figures from Columbia University, cited by Chinese state media, said China had petrol reserves of some 1.4 billion barrels.
Despite its reserves, Beijing has shown signs of caution to manage its supplies in the short-term. Authorities in China reportedly ordered its oil refineries to temporarily cease fuel exports, in an attempt to keep domestic prices under control.
In response to the crisis, other Asian countries have implemented various cost-cutting measures, including changes to work schedules and reduced travel to conserve fuel.
Moreover, as gasoline prices in Japan reached record highs and South Korean public institutions cut back on vehicle use, the impact of the Iran conflict is felt strongly in the region.
