CHINA'S most recent fuel price hike has triggered a fresh wave of inflation concerns among a cost-sensitive public that has seen soaring prices nip away at their incomes and drive up living costs.
To reflect price changes on the international crude oil market, China's economic planner, the National Development and Reform Commission, announced on Monday evening that it would increase gasoline and diesel prices by 600 yuan (US$95) per ton starting yesterday.
The news immediately became the focus of heated discussion on Weibo.com, China's most popular microblogging service, as netizens gathered to assess the hike's impact on living costs.
"Oil prices rise again. Now I can afford to buy a car, but can't afford to drive one," read a Weibo post by "Ma JieMagic."
Many others voiced frustration over wage increases not keeping pace with rising prices.
"How I hope our wage growth will keep pace with the oil price rises," read a response posted by "Xiaoyun."
The topic garnered nearly 28 million posts on Weibo by yesterday afternoon, underscoring growing fears that the rise will kick off a new round of inflation.
These worries came as the price of scallion, a common food on China's dinner tables, has surged more than 50 percent over the past year, despite the fact that inflation in the country has just started to ease.
Prices of some other vegetables, including cabbage, celery and tomato, also climbed to levels near or above the prices seen during the Spring Festival in late January.
Government data showed that China's consumer price index, the main inflation gauge, rose 3.2 percent year on year in February, the lowest rate of growth in 20 months. The Chinese government aims to keep the CPI increase to around 4 percent for 2012. The index climbed 5.4 percent last year.
Zhuang Jian, a senior economist with Asian Development Bank, said communications and logistics sectors will be hit by the rise in oil prices, which will, in turn, influence the prices of agricultural products.
To mitigate the impacts, the NDRC said the government will provide subsidies for people working in the fishery, forestry and public transport sectors. The government has also ordered railway and urban transportation administrators not to hike prices.
Source:shanghaidaily