Fuel prices to increase sharply in China

One of the perks of living in China is the low price of car fuel – especially compared to Europe. I pay less than 50 Euro cents for a liter of fuel, a fraction of the prices in my native Holland. But that might soon end. China Car Times reports that prices might go up by 50%, and later say the price might go up to RMB 10 per liter (which is a 100% hike – math is not easy Mr. China Car Times blogger!).

Honestly, I would be very happy if the price would go up so much. Not that I like to spend more money, but hopefully a lot of frugal Shanghainese would think twice before using their cars. It would likely be a good way to reduce traffic jams, which cost me a lot more in the form of wasted time. But it might be an additional burden on the already overloaded public transportation system (try to take the metro in Xujiahui at 8:30 AM, not fun).

Likely taxi fares will also increase, otherwise the cabbies have no way to survive. The good news is that it will make finding a cab easier (at times it has become virtually impossible to find an empty taxi), because people might substitute cab rides for public transport.

I don’t think the prices will increase by a big percentage right away. I am sure the government realizes that increasing fuel prices can easily trigger demonstrations (think Birma a few weeks ago), so they will likely use a series of small increases to make it seem less painful. We will find out soon.

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