Rising fuel prices drive worries over living costs, inflation_Macro-Economy--China Economic Net
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Rising fuel prices drive worries over living costs, inflation
Last Updated(Beijing Time):2012-03-20 22:19

Prices of some other vegetables, including cabbage, celery and tomato, also climbed to levels near or above the prices seen during the Spring Festival holiday period.

Government data showed that China's consumer price index (CPI), a main gauge of inflation, rose 3.2 percent year-on-year in February, marking 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.

While the public is expressing concerns over the rippling effects of price rises, experts expect limited impacts on the CPI, as oil only accounts for around 0.5 percent of the basket of goods used to calculate China's CPI.

Data from Goldman Sachs showed that the hike is expected to add about 0.37 percent to the CPI's rise this month.

Zhuang Jian, a senior economist with Asian Development Bank, said communications and logistics sectors will be directly affected by the rise in oil prices, which will, in turn, influence the prices of agricultural products.

But he said impacts on overall prices are difficult to measure.

Heavily reliant on imports, China adopted an oil pricing mechanism in 2009 that allows the NDRC to adjust retail fuel prices when international crude oil prices change by more than 4 percent over 22 working days.

Oil prices have since been largely determined by international trends, bringing major uncertainties to the government's price-control efforts.

Source:Xinhua 
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