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ReturnChina vows stable prices after fuel price hike
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PublishDate：
2008-06-23 15:40:00
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BEIJING, June 23 (Reuters) - China will cap price rises by manufacturers to keep consumer inflation stable following the country's fuel price hike, the National Development and Reform Commission said in a statement over the weekend.
China's surprise announcement on Thursday of a nearly 20 percent increase in fuel prices sparked worries that it would stoke inflation already near its highest in more than a decade.
"All regions must seriously implement measures concerning the adjustment on refined oil and power prices, strictly control chain reactions and keep the consumer price level basically stable," it said on its website (www.ndrc.gov.cn).
The NDRC said the government would limit price rises for downstream products and urge manufacturers to cut production costs in order to digest much of the fuel price rise themselves.
Analysts have said that businesses already facing higher labour costs will find their margins squeezed if they do not pass the rising fuel costs on to consumers.
The NDRC statement said any any official not fully implementing the new measures would be punished.
The planning agency last week kept some prices unchanged, including liquefied gas, natural gas and public transportation rates, to reduce the impact of the fuel price increase on ordinary people.
Government officials and economists have said the fuel price rise would add less than 1 percentage point to inflation this year.
China's inflation dropped to 7.7 percent in May from 8.5 percent in April, but pipeline inflationary pressure has been building as input costs have risen for producers at their fastest pace in nearly four years. (Reporting by Langi Chiang; Editing by Simon Rabinovitch)
Source: Reuter News
China's surprise announcement on Thursday of a nearly 20 percent increase in fuel prices sparked worries that it would stoke inflation already near its highest in more than a decade.
"All regions must seriously implement measures concerning the adjustment on refined oil and power prices, strictly control chain reactions and keep the consumer price level basically stable," it said on its website (www.ndrc.gov.cn).
The NDRC said the government would limit price rises for downstream products and urge manufacturers to cut production costs in order to digest much of the fuel price rise themselves.
Analysts have said that businesses already facing higher labour costs will find their margins squeezed if they do not pass the rising fuel costs on to consumers.
The NDRC statement said any any official not fully implementing the new measures would be punished.
The planning agency last week kept some prices unchanged, including liquefied gas, natural gas and public transportation rates, to reduce the impact of the fuel price increase on ordinary people.
Government officials and economists have said the fuel price rise would add less than 1 percentage point to inflation this year.
China's inflation dropped to 7.7 percent in May from 8.5 percent in April, but pipeline inflationary pressure has been building as input costs have risen for producers at their fastest pace in nearly four years. (Reporting by Langi Chiang; Editing by Simon Rabinovitch)
Source: Reuter News
