China's Ministry of Communications has issued an urgent circular, asking local communications authorities to adjust the mechanism of transport price formation so as to follow the fuel price rise across the country.

In a circular made public on Sunday, the National Development and Reform Commission, which regulates energy prices, said the producer prices of gasoline will be raised by 300 yuan (US$37.5) per ton while that of diesel oil will go up by 200 yuan per ton.

Considering the huge impact of the price hikes on the transport industry sensitive to higher prices, the Ministry of Communications asked local departments to quickly set up a new transport price mechanism that has closer linkage with fuel price fluctuations.

Transport enterprises and passengers should share the cost brought by the fuel price hike, the ministry said in the circular.

Fuel subsidies from the central government should be given to operators of rural road passenger transport, the ministry said.

Local authorities should map out special quick-response schemes in advance so as to prevent unexpected incidents involving mass participation, it said.  

(Xinhua News Agency March 28, 2006)