Ｔｈｅ　Ｅｎｄ　ｏｆ　Ｃｈｅａｐ　Ｆｕｅｌ？.docVIP

Ｔｈｅ　Ｅｎｄ　ｏｆ　Ｃｈｅａｐ　Ｆｕｅｌ？ 　　ON June 19, the National Development and Reform Commission (NDRC) announced that prices for petrol and diesel would rise by RMB 1,000 per ton the following day. Liu Su was driving to his suburban home when he heard the news on the radio. He immediately headed for the nearest gas station, but a long line of cars had already formed when he arrived. 　　The increase saw prices at petrol pumps go up by more than half a yuan per liter for all grades of fuel. Liu Su drives a Bora Volkswagen with a 1.6-liter engine. The car consumes around 10 liters for every 100 kilometers traveled, amounting to an extra RMB 2,000 annually that Liu needs to now spend on petrol. “Petroleum expenses already account for about 12 percent of my annual spending,” he sighs. “Not to mention maintenance fees and fines for occasional traffic violations.” 　　 　　Why Are Petrol Prices Rising? 　　 　　The NDRC’s announcement represented the biggest petrol price hike for several years. In the statement announcing the increase, the commission pointed out that the international price of oil has spiked recently, while domestic oil prices have remained too low. Enterprises importing crude oil have had to bear big losses. 　　“The government outlays a huge amount in subsidizing refined oil domestically, especially since energy prices on the world market have shot up,” says Wu Ying, a researcher with Guodu Securities. He claims domestic plants lose RMB 1,600 to 1,800 on every ton of refined oil they produce. With world oil prices rising, figures for the first quarter of 2008 indicated the government was going to have to spend RMB 150 billion in subsidies this year if domestic prices were not adjusted. “The government had no choice, but to increase the price,” says Wu. 　　Domestic petrol prices rose by RMB 500 per ton last November, which along with the June increase saw prices at petrol pumps jump by 16 to 18 percent in little over half a year ― much higher than forecast. This reflects