Beijing hikes fuel prices to pay for cleaner blend

The cost of refueling a vehicle in Beijing has risen by as much as 4 percent to cover the cost of cleaner fuel.

Gas prices were raised two percent while diesel pump prices rose by four percent. According to the Beijing Municipal Commission of Development and reform, the price hike was to help the city pay for the fuel that meets the Euro-IV emission standard.

The Chinese government had set fuel prices for years, often without regard to fluctuations in the global oil market. Pressure from refiners who have borne the rising cost of the fuels is thought to have influenced the Beijing authorities’ decision to raise prices.

The European emission standard was applied in January to improve China’s air quality levels in time for the Summer Olympics (see The fetid river you didn’t see on the Beijing Olympics). With vehicle emissions as one of the leading causes of air pollution, the Euro-IV standard has a 50 parts-per-million limit on sulfur levels in gasoline and diesel, and was expected to reduce annual sulfur dioxide levels by nearly 2,000 tons.

The air quality results were so popular with Beijing residents that city authorities are drafting plans to maintain the current clearer skies by urging increased use of public transit and reducing the cars on the roads.

In June, China enacted a 20-percent nationwide increase in the cost of fuel, which has doubled since the start of 2003. In March 2006, a similar nation hike made Beijing's fuel prices higher than the national average.