As the refined oil pricing mechanism is still being hotly debated within the oil market, the National Development and Reform Commission (NDRC) decided to reassess its practical implementation, as reported by Beijing Business Today on August 11.
Insiders said the NDRC is to collect information from all sectors and will make adjustments according to the comprehensive analysis of the feedback.
The new refined oil pricing mechanism has been under fire ever since it was implemented last December. There are still some problems with the new mechanism.
"The relationship between supply and demand which is influential for pricing, was ignored," said Zhong Jian, Vice President of Oilgas.com.cn. "The maximum range for price adjustment should be set, and the price should be adjusted timely to diminish the market expectancy, thus constraining possible speculation," added Zhong.
Some experts also suggest loosening China's policy on refined oil imports, so that when the international oil price is lower than the domestic price, the middlemen could contain the monopolized domestic oil market with a comparatively low import price, and the domestic price would not be too high.
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(China.org.cn by Fan Junmei August 11, 2009)