Beijing, March 24 — China has moved to soften planned fuel price increases as global energy costs surge in the wake of the Iran war, which has disrupted one of the world’s most critical oil shipping routes.
Petrol prices in China have already climbed about 20% since the conflict began, following Iran’s effective closure of the Strait of Hormuz. Originally, gasoline and diesel were set to rise by 2,205 yuan ($320) and 2,120 yuan per tonne respectively. But Beijing’s National Development and Reform Commission (NDRC) announced late Monday that the hikes will be nearly halved to 1,160 yuan and 1,115 yuan, effective Tuesday.
The decision comes as more than 300 million Chinese drivers face mounting costs at the pump. Over the weekend, long queues formed at petrol stations across major cities, with some outlets posting notices that they had run out of fuel. Even with the reduction, this marks China’s fifth and largest fuel price increase of the year.
Global oil markets remain volatile. Brent crude surged past $100 a barrel on Tuesday, just a day after prices plunged amid conflicting reports of possible U.S.–Iran talks. Analysts say Beijing has long relied on Gulf states’ abundant supply to build one of the world’s largest oil reserves. Ole Hansen, head of commodity strategy at Saxo Bank, estimates China’s reserves at around 900 million barrels—nearly three months’ worth of imports.
China has also been a major buyer of Iranian crude, despite U.S. sanctions. Reports suggest Beijing purchases more than 80% of Iran’s oil exports. Customs data shows crude imports rose 16% in January and February compared to last year. Still, authorities have ordered refineries to temporarily halt fuel exports to stabilize domestic prices.
The NDRC said in a statement: “To mitigate the impact of abnormal increases in international oil prices, ease the burden on downstream users and ensure stable economic operations and public welfare, temporary regulatory measures have been adopted.”
Regional Impact
China is not alone in grappling with soaring energy costs. Across Asia, governments are rolling out emergency measures:
- Philippines: Government employees ordered to work four days a week; transport groups staging strikes against fuel hikes.
- Sri Lanka: Public institutions closed every Wednesday; bus services nearly halted as operators demand fare revisions.
- Thailand & Vietnam: Citizens encouraged to work from home to conserve fuel; Thai civil servants told to suspend overseas trips and adopt energy-saving practices.
- Japan & South Korea: Both heavily reliant on oil passing through the Strait of Hormuz. Japan’s gasoline prices hit a record 191 yen ($1.20) per litre last week, while South Korea’s president announced cutbacks in public sector car use and canceled foreign travel to focus on the crisis.
