Shanghai yesterday substantially raised the price of bottled liquefied petroleum gas for private use in the fallout from the global surge in crude-oil prices.
The guidance retail price was raised to 84 yuan (US$11.31) per 14.5-kilogram bottle, according to a city government statement. The previous guidance was 77 yuan a bottle, set about two years ago, according to the Shanghai Price Bureau.
The government said the price increase of bottled LPG is direct in response to the crude prices and follows the National Development and Reform Commission's move to raise petrol and diesel prices early this month.
And there is no international respite in sight.
Oil prices rose again yesterday as some OPEC members talked about converting their cash reserves to the Euro and away from the "worthless" United States dollar, The Associated Press reported .
Light, sweet crude for January delivery rose 81 US cents to US$94.65 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe yesterday. The contract rose US$1.77 to settle at US$93.84 a barrel on Friday.
In London, January Brent crude futures added 53 US cents to be US$92.15 a barrel on the ICE Futures exchange.
All of these factors have a global Richter effect - and Shanghai is no exception to the rule.
"The price hike (in Shanghai) can help better arrange gas sources and safeguard market supply," the government statement said.
Gas retailers are allowed to raise or reduce prices by 10 percent to end users based on the guidance figure.
There are about 700,000 household users of bottled LPG in Shanghai. Bottled LPG is consumed by households not connected by gas pipe. Demand typically surges in winter.
Meanwhile, the government said it has increased subsidies to the city's low-income families starting in October to address the big rises in general living costs.
The government has also asked distributors to strictly implement the price guidance, "actively" source supplies, and not to hoard products to manipulate the market.
(Shanghai Daily November 20, 2007)
