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China's Gasoline Prices Surpass Those in US

Americans may be grumbling about the high price of gas, but most still pay less for fuel than consumers in other parts of the world. Many in Europe pay more than two dollars per liter - roughly double the average price for gasoline in the U.S. And now, even Chinese consumers - who have long enjoyed government subsidies - are paying more for fuel than Americans. The rising prices are adding to fears of slower growth in the world's two biggest economies.

Record oil profits is an election year issue in the United States.

"Every time gas goes up by a penny, these companies usually profit another $200 million in quarterly profits," said President Barack Obama.

But cash-strapped Americans are just looking for relief.

"I don't know what it was last time, but I don't remember it being $4 [per gallon]," said one man.

Americans are not the only ones complaining. Rising fuel prices are starting to hurt Chinese motorists. Beijing has raised gasoline prices twice in less than two months in a bid to curb the use of fossil fuels. And now Chinese consumers are paying more than Americans. Chinese truck driver Ding Shubiao said transportation companies are especially vulnerable.

"Our team has dozens of trucks. If one liter costs an extra half a yuan and each truck takes over 400 liters of diesel, then we lose 200 or 300 yuan for each vehicle," he said.

Asian Development Bank economist Zhuang Jian said the higher fuel costs are making Chinese companies less competitive.

"If the price of oil goes very high, it will have an effect on various industries, and ultimately will slow their speed of growth," said Zhuang.

Energy consumption is declining in the United States, but it is rising in developing markets like China and India. Higher demand means higher prices, but oil analyst Simon Wardell said uncertainty in oil-producing nations, such as Iran, is adding a premium to world prices.

"It would only take a disruption from Iran, the amount they export, roughly two million barrels a day exported from Iran. If that goes off the market, then yes we really do have some issues with trying to meet that supply," said Wardell.

Saudi Arabia, the world's top oil exporter, says it is prepared to increase production as needed. Without any relief soon, Wardell said, rising prices will choke economic growth, not just in China and the U.S., but around the world.  

"The global economy is still recovering and these sorts of prices knock that back a bit," said Wardell.

But oil prices may be leveling off. Crude oil futures dipped to six week lows on Friday on signs the U.S. and Europe are close to releasing emergency oil reserves to put a brake on rising prices.

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Comment Sorting
Comments
     
by: William
April 03, 2012 10:41 AM
Good let there economy go into the gutter too! We know how much china likes to play by the rules they deserve what we deserve and we never had trade with the soviet union and why are we doing business with china, I thought it was the job of the united states to get rid of communism but greedy american busnessmen only care about money not their country!

by: Christine
March 31, 2012 5:18 AM
If the situation keep it going, I am afraid that I will even not be able to afford to the bus fees.That's terrible. But I believe that everything will be better.

by: phillip
March 31, 2012 12:07 AM
This is no joke. This is a problem for many families with mouths to feed.

by: Leaf
March 30, 2012 6:56 PM
It's true.

by: william young
March 30, 2012 5:12 PM
what I concern about is the growing oil price and the basic household consumption. do you think the comparison between PRC and USA is reasonable? maybe U neglect some basic facts.

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