Care Prices: China sets the price of fuel due to the war in the Middle East

The Chinese regime has once again intervened in its economy. This time, it set maximum fuel prices to contain the impact of the rise in oil, driven by the war in the Middle East

.

The measure was announced by the National Development and Reform Commission (NDRC). According to the government, the objective is to prevent the international rise in crude oil from hitting consumers and companies outright

.

However, the move also exposes the weaknesses of the Chinese model, which depends on state controls to cushion external shocks.

How the new limits on gasoline and diesel work The

authorized adjustment increases the price of gasoline by 1,160 yuan per ton. In the case of diesel, the increase will be 1,115 yuan.

But these increases are artificially limited. They represent about half of what would have been appropriate under the market system

.

Without intervention, gasoline would have risen 2,205 yuan per ton. The diesel, 2,120

yuan.

A system that depends on state control

The decision marks an unusual event. This is the first intervention of its kind since 2013, when China established its current pricing scheme.

Under normal conditions, fuels are adjusted according to the international value of oil. But the escalation of the conflict in the Middle East altered that mechanism

.

The barrel topped $100 at several recent times. Tension in the Strait of Hormuz and attacks on energy infrastructure created global uncertainty.

Faced with that scenario, Beijing chose to intervene directly, instead of allowing the market to reflect real prices.

War in the Middle East and pressure on oil The

conflict between the United States, Israel and Iran reconfigured the energy scenario. Attacks on key facilities impacted global supply

.

This raised prices and generated volatility.

While Western economies seek to stabilize the market, China opts for internal controls.

Official objectives and warnings of the regime

The Chinese government stated that the measure seeks to “mitigate the abnormal rise in oil” and “guarantee economic stability

”.

He also warned that he will sanction those who fail to comply with fixed prices or alter the market order.

This type of policy reinforces state control over strategic sectors, in a context of increasing economic pressure.

Energy dependence and link with Iran

China is the main buyer of Iranian oil. This relationship partly explains their position in the face of the conflict.

The regime has condemned the attacks by the United States and Israel, while trying to protect its domestic market from the energy impact.

However, dependence on imported crude leaves China exposed to

global volatility.

A recent history of more moderate increases

In March, the NDRC had authorized lower increases. Gasoline rose 695 yuan per ton and

diesel 670 yuan.

The current jump reflects a change of scenery. The war increased pressure on prices and forced the regime to intervene directly.