China fuel price hike may not sap demand
By The Associated Press Saturday, June 21, 2008SHANGHAI, China - Chinese motorists, long accustomed to cheap gas, seemed to take in stride a government decision to boost fuel prices Friday by as much as 18 percent.
While higher prices for China’s state-controlled fuel will inevitably squeeze consumers at both filling stations and grocery stores, analysts say it is unlikely to make an immediate or huge dent in the country’s hunger for oil.
China’s economy is booming, and people are buying cars and air conditioners as their incomes grow. There is huge pent up demand in a country of 1.3 billion, where per capita energy consumption remains far below western nations.
The silver lining is that with the government increasing prices, refiners may finally boost production of gasoline, diesel and other refined products, helping to alleviate long lines at gas stations and a widespread fuel shortage.
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