China raised prices for fuel by as much as 18 percent on Friday in a move intended to cool the nation's surging energy consumption.
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The price increases were announced late Thursday by the National Development and Reform Commission, the government's main economic planning agency.
Prices of gasoline and diesel oil rose by 1,000 yuan ($145) per ton to 6,980 yuan ($1,015) and 6,520 yuan ($949), or 16 percent and 18 percent, respectively.
Aviation kerosene rose by 1,500 yuan ($218) per ton to 7,450 yuan ($1,084), the commission, known as the NDRC, said on its Web site.
Electricity prices will also rise for most businesses by 0.025 yuan (0.0036 cents) per kilowatt, although residential housing and the farming and fertilizer industries would be exempt, the planning agency said.
Natural gas and liquefied petroleum gas prices will remain unchanged, it said.
The China Daily newspaper reported Friday that areas in Sichuan province, hit by a massive earthquake last month, were exempt from the increases.
The government hiked fuel prices by about 11 percent in November but had kept them frozen at that level, seeking to avoid fanning inflation which has touched 12-year highs since the beginning of the year.
That policy, however, has led to shortages at the pump as refiners find themselves squeezed by rising oil and gas prices.
To help counter such shortages, China's largest city, Shanghai, on Monday announced an increase in prices for liquefied petroleum gas used by scooters.
Earlier this week, the NDRC said it would look for an opportunity to adjust oil product prices, prompting a rally in shares for major refiners that have been swallowing huge losses due to soaring crude oil prices.
In an explanatory note accompanying the announcement, the commission said soaring oil prices had created "contradictions in the purchasing price of oil being higher than the selling price of refined products that were becoming more glaring by the day."
That had led some refiners to halt or suspend production, bringing supply interruptions and long lines at some filling stations, the NDRC said.
An "appropriate rise" in the price of refined products would "be beneficial to alleviating the difficulties enterprises were having in managing production," it said. That would also boost domestic output of such products, ensure supply, and "promote the conservation of energy resources," the commission said.
The American depository receipts for PetroChina Co., a state-owned oil company, jumped 4.4 percent, or $5.96, to $140.49 after the announcement. China Petroleum & Chemical Corp., or Sinopec, Asia's biggest refiner by capacity, rose $8.07, or 7.7 percent, to $112.42.
China National Offshore Oil Corp., or CNOOC, which is not as heavily involved in the refinining business, fell $5.26, or 3.1 percent, to $163.20.
Coal prices that have risen 80 yuan ($12) in the past two years have created massive losses for four out of the country's five major power producers, it said.
Along with the electricity price rise, the government would also continue to provide subsidies to the industry to guarantee supply, the NDRC said.
Also contributing to a decline in the price of oil Thursday, Iraq's oil ministry said it was close to signing oil service deals with several major Western oil companies in an effort to boost its output capacity--the first major Iraqi contracts with big Western companies since the 2003 U.S.-led invasion.
The deals, once signed, are something of a stopgap measure to help Iraq begin to increase production until the country is able to approve a new national oil law--now held up by political squabbles among Sunnis, Shiites and Kurds.
