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Life of Chinese people under soaring oil price
Last Updated(Beijing Time):2005-07-09 11:57

Driving home and to work everyday, Chen Yi has been attaching more and more attention to the soaring oil price in the international market during the past year.

Working at a media company, Chen earns about 5,000 yuan (604 US dollars) a month, an income ensuring him a not bad life in the capital of China.

However, Chen said that every time he saw the international crude oil price hick up to new high, he would feel shocked, though his life has not been much affected by the astonishing oil price.

Chen was given another big shock on Thursday when the closing price of light crude oil hit 61.28 US dollars for the first time in the New York Mercantile Exchange (Nymex). "What I am worrying about is that China's gasoline price will be raised again," he said.

Based on the weighted average price of oil product in the three markets in Singapore, Rotterdam and New York, the wholesale and retail price of China's oil products are determined and published by the State Development and Reform Commission (SDRC) according to the domestic market.

Since July 2003, China has seen six rises of its oil product price.

As most Chinese urban people still don't own a car, the soaring international oil price has had less influence on their lives. However, with the expected growth of China's auto market, the influence of the international oil price on urban people is foreseen, said Wang Xiaoguang, an economist with the macro-economic research center of the SDRC.

According to statistics of the China Automotive Industry Association (CAIA), the top five best-sellers in China's auto market during the first four months of 2005 are mostly economic auto types with lower discharge volume, accounting for one fourth of the total sales.

Due to the high oil price, since last spring China has seen a rising trend of price of farming materials such as chemical fertilizer, agricultural plastic sheeting and pesticides.

Monitoring of the SDRC on 38 regions of the country found that the average price of homemade carbamide in June 2005 is 1.99 yuan (0.24 US dollars) per kilogram, more than 20 percent higher over the same period of last year.

To reduce the influence of hiking farming material prices to the least possible, the Chinese government has taken a series of measures including controlling the price of chemical fertilizer and the rising extent of diesel price.

However, it is a sign that the daily life of China's numerous farmers are becoming more and more open to concussions from the international oil price, said Niu Li, an economist with the State Information Center.

According to the State Statistics Bureau, the General Consumer Price Index in the first five months of 2005 is 102.4, maintaining the declining trend of price rising rate since last year.

However, with the upgrading of China's industrialization, and the increase of the average per capita energy consumption, China's demand for petroleum is due to rise, said Wang Xiaoguang. Chinese people will be more and more deeply affected by changes of the international oil price, he said.

In 2004, China saw 120 million tons of petroleum imported from overseas, accounting for 40 percent of its total oil consumption.

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