Fuel sellers fined for illegally increasing price

PUBLISHED : Thursday, 29 November, 2007, 12:00am
UPDATED : Thursday, 29 November, 2007, 12:00am

Crackdown on oil profiteering

Six independent fuel service stations that raised diesel prices above the state-set level have been fined by the mainland's top economic planning agency.

The crackdown on unregulated oil price rises came a day after President Hu Jintao told a Politburo meeting the government would make controlling inflation and preventing the economy from overheating its top priorities.

A mainland securities firm says it expects consumer inflation to hit another multi-year high this month, as the government grows increasingly concerned about the threat to social stability posed by continued price rises.

Quoting research reports, the Shanghai Securities News said the consumer price index rose 6.7 per cent year on year this month, up from the 11-year high of 6.5 per cent last month.

'The November CPI would be another record, moving between 6.6 per cent and 6.8 per cent year on year,' the newspaper said, quoting a research report compiled by Guohai Securities.

Surging food and fuel costs have been chiefly to blame for widespread inflation this year. Food prices, which comprise a third of the mainland's consumer price index basket, rose 17.6 per cent year on year last month, compared with a 16.9 per cent rise in September.

The Shanghai Securities News said food prices would rise by 18 per cent year on year this month.

The government recently raised the price of oil products by 10 per cent as the price of international crude approached US$100 a barrel. It said the fuel price rise would contribute to a 0.5 per cent rise in the price index.

The National Development and Reform Commission said the six service stations sold diesel at prices which were 6.8 per cent to 42 per cent above official ones.

The stations were in Sichuan, Guizhou, Hebei, Shaanxi, Hunan and the Ningxia Hui Autonomous Region, the commission said.

'Some independent fuel stations raised retail prices without approval, some stopped sales during the daytime in order to fuel an atmosphere of a shortage, while others sold fuel at prices higher than the state- approved level at night,' it said.

Service stations also refused to provide sales invoices, or reported lower prices on invoices, while others hoarded fuel products to profiteer.

The irregularities had disturbed market order and aggravated market shortages, the commission said, vowing to punish those responsible.

The commission has told local governments to step up a crackdown on retailers that engage in hoarding and who raise prices without government permission, the Shanghai Securities News said in separate report yesterday.

The mainland has seen fuel rationing and queues across the country at many service stations run by state-owned major oil companies in coastal cities. Many independent stations either halted operations or demanded higher prices due to a lack of supplies.