China’s National Development and Reform Commission (NDRC) adjusts retail gasoline and diesel prices roughly every 10 days based on international crude oil benchmarks. In late March 2026 (with some earlier adjustments noted around March 10), authorities announced significant hikes due to rising global crude prices, which had pushed Brent crude above $100 per barrel at times.

• The hikes: Gasoline retail ceiling prices rose by 1,160 yuan ($168) per metric ton (or in one reported instance, 695 yuan/$100 per ton, about 7%). Diesel increased by 1,115 yuan ($168) or 670 yuan per ton. This translated to roughly 0.55–0.58 yuan per liter more at the pump for common grades, adding about 27–50 yuan (~$4–$7) to a typical 50-liter tank fill-up, depending on the exact adjustment and grade. It was described as one of the largest single adjustments in years (or the biggest of 2026 so far), even after moderation.
• Panic buying and lines: A notice from state oil giant Sinopec alerting customers to a “meaningful” upcoming increase (effective around March 24) triggered widespread panic buying. Drivers rushed to stations over the weekend and into Monday, creating long queues in cities like Beijing, some stretching nearly 2 km, with reports of stations running out of fuel temporarily. Similar rushes occurred in other areas.

The government intervened with temporary regulatory measures to cap the increase at roughly half of what the standard formula would have dictated (e.g., limiting it from a potential ~2,205 yuan/ton for gasoline down to 1,160 yuan/ton). Officials cited the need to “reduce the burden” on drivers, ease impacts on downstream users, and maintain economic and social stability. This was an emergency step not commonly used, dusting off powers unused for over a decade in some analyses.

Why It Happened:

China is the world’s largest oil importer and has massive refining capacity, but it remains heavily exposed to global crude prices. The recent spike stemmed from geopolitical turmoil in the Middle East, including the U.S.-Israeli conflict with Iran, which disrupted supplies and effectively impacted shipping through the Strait of Hormuz (a key chokepoint for ~20% of global oil trade). China had been a major buyer of Iranian oil. Even with diversified sources and strategic reserves (reportedly enough for several months), the pass-through to domestic fuel prices was unavoidable under the mechanism, though moderated for consumer protection.

Broader context:

Gasoline prices in China have risen ~20% since the conflict intensified earlier in 2026. The country has seen multiple upward adjustments this year. Some stations and social media (Weibo, Rednote) showed photos and videos of the lines, with users discussing switching to electric vehicles (EVs) due to cheaper nighttime charging.

Impacts and Reactions:

• Consumers: Higher costs for the hundreds of millions of drivers still reliant on gasoline/diesel vehicles, though the partial cap softened the blow (saving ~40–50 yuan per tank compared to a full formula hike). It adds pressure on household budgets and logistics.
• Economy: Higher fuel costs could raise transportation and manufacturing expenses, but China’s rapid EV adoption and diversified energy mix (including coal, renewables, and nuclear) provide some buffer compared to more oil-dependent economies.
• Market response: Some reports noted increased interest in Chinese EVs and battery stocks as consumers look for alternatives. Refiners faced margin pressures from high crude input costs.
• Government stance: Beijing emphasized stability, using price controls while signaling preparedness for supply disruptions. State media highlighted that markets remained largely unshaken overall.

This fits a pattern where China links domestic fuel prices to global benchmarks but uses administrative tools to prevent excessive volatility. Similar queues have occurred in past oil spikes (e.g., 2022). For the latest exact pump prices, they vary by city and grade (e.g., ~9.20 CNY/liter for 92-octane around the adjustment date), but the trend is upward with global oil.

China’s fuel pricing mechanism for gasoline and diesel is a hybrid system managed by the National Development and Reform Commission (NDRC), the country’s top economic planner. It links domestic retail prices to international crude oil markets while incorporating domestic costs and allowing government intervention for stability. The current framework was introduced in 2013 and remains in effect as of 2026.

Core Elements of the Mechanism:

• Adjustment Frequency: The NDRC reviews and adjusts the maximum retail ceiling prices for gasoline and diesel every 10 working days. Adjustments take effect at midnight on the announcement day (typically announced on a Monday or as scheduled).
• Link to International Crude Oil: Prices are primarily based on changes in a weighted basket of global benchmarks. This basket reflects China’s crude import mix and reportedly includes:
  • ICE Brent
• • NYMEX WTI
• • DME Oman
  The exact weights and full formula are not publicly disclosed by the government, but they are designed to track China’s actual import slate.
• Calculation Basis: The NDRC considers:
  • Changes in the 10-working-day average international crude prices.Average refining/processing costs.Taxes and fees.Distribution and retail expenses.An “appropriate” profit margin for refiners and retailers.
  The goal is to allow refined product prices to reflect crude costs reasonably while avoiding excessive volatility.
• Price Caps (Ceilings): The NDRC sets provincial or regional maximum retail prices. Actual pump prices at stations (operated by state giants like Sinopec, PetroChina, or private players) can be lower than the ceiling depending on local competition and supply, but they cannot exceed it.

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China Raises Gasoline Prices Due to Rising Global Oil Prices, Triggering Lines

From the Institute For Energy Research

By IER

At midnight on March 10, China increased domestic gasoline and diesel prices under the country’s fuel pricing mechanism, according to China’s National Development and Reform Commission. The agency announced that gasoline prices would increase by 695 yuan per ton ($100 per ton), about 7%, while diesel would increase by 670 yuan per ton ($97 per ton). The announcement spurred long lines at gasoline stations as residents wanted to fill their tanks before the price increase took effect. In some cities, the waiting vehicles formed long traffic queues extending nearly two kilometers onto nearby roads.

According to Vision Times, converting to retail prices, the increase translates to approximately:

• 0.55 yuan per liter (30.3 cents per gallon) for 92-octane gasoline
• 0.58 yuan per liter (31.8 cents per gallon) for 95-octane gasoline
• 0.57 yuan per liter (31.4 cents per gallon) for diesel

Prices for 92-octane gasoline in many regions were approaching or exceeding 7.5 yuan per liter ($4.129 per gallon), while 95-octane gasoline in some areas reached eight yuan per liter ($4.39 per gallon). For a typical private vehicle with a 50-liter fuel tank (about 13 gallons), filling up with 92-octane gasoline will now cost about 27.5 yuan ($4) more per tank. At 7.5 yuan per liter, a tank of gas would cost roughly $54.

Prior to the conflict with Iran, in the first two months of the year, China adjusted petroleum prices four times, with three increases and one unchanged cycle. The current adjustment, due in part to the closure of the Strait of Hormuz, is the fifth fuel price revision of the year. China is the world’s top oil importer, importing more than 70% of its oil, and has been taking measures, including banning refined fuel exports, to ensure supplies for domestic consumption amid the conflict in the Middle East. China has the largest domestic refining capacity in the world.

Despite the higher prices, some fuel retailers in China are facing shrinking profit margins. Wholesale prices for gasoline and diesel have risen with oil prices, while retail prices remain capped under China’s pricing system, narrowing the gap between wholesale and retail prices. Theoretical profit margins for major diesel distributors had dropped to about 666 yuan (about $97) per ton as of March 6th, down nearly 59% from the previous period. Profit margins for gasoline and diesel at independent refineries also declined significantly.

Iran Still Delivers Oil to China

Despite the closure of the Strait of Hormuz, through which 20% of global oil flows, mostly to Asia, Iran has continued to ship oil at a rate of 1.1 million to 1.5 million barrels per day. China buys 90% of Iran’s sanctioned oil exports at below market prices. Iranian oil accounts for 11.6% of China’s seaborne imports this year, mostly bought by independent refiners due to the discounted price.

Ninety percent of Iran’s oil shipments have been leaving via Kharg Island, where the United States attacked military bases and possibly obliterated them, although their oil facilities were spared. President Trump said the United States would strike the export terminal if Iran kept attacking vessels in the Strait of Hormuz. Kharg is located 16 miles from Iran’s coast and about 300 miles northwest of the Strait of Hormuz. Its deep waters enable the loading of oil tankers that are too large for the mainland’s shallow coastal waters.

According to Reuters, Iran has exported 1.7 million barrels per day of oil so far this year, of which 1.55 million barrels per day were shipped via Kharg. Kharg has storage capacity for about 30 million barrels, and held about 18 million barrels of oil as of early March. As OPEC’s third-largest oil producer, Iran supplies about 4.5% of global oil consumption, producing about 3.3 million barrels per day of oil and 1.3 million barrels per day of condensate and other liquids.

The Epoch Times reports that Iranian oil shipments to China have remained largely unaffected by the war because of contingency planning by China and Iran. Several years ago, China began the groundwork for an alternative oil transport route from Iran. Jask Port, outside the Strait of Hormuz, allows tankers to enter the Gulf of Oman without passing through the strait. China supported the construction of a 1,000-kilometer pipeline linking the inland oil hub of Goreh to the Jask terminal on the Gulf of Oman. The project was part of the 25-year cooperation agreement signed between China and Iran in 2021.

China’s continued purchase of Iranian oil provides Iran with financial support to sustain the conflict and allows China to secure discounted oil and expand its strategic energy reserves as global oil prices continue to rise. China’s strategic and commercial oil reserves already total 1.3 billion barrels.

Analysis

China and Iran’s close economic relationship means that China is heavily invested in the war in Iran, despite its lack of a military presence in the region. Although China and Iran implemented a contingency plan with the Jask Port, it has rarely been used because it’s viewed as less efficient, according to CNBC. How the war continues will affect where China gets its oil in the future. As IER’s Caleb Jasso explains for RealClearEnergy, “If the war continues to escalate, or perhaps if Kharg Island’s energy infrastructure, which processes 90% of Iran’s oil for export, is attacked or occupied, China could potentially lose close to 20% of its seaborne imports. If the war leads to a regime change in Iran more favorable toward the West, or Iran’s ability to export discounted oil to China is impacted by either military action or the lifting of sanctions, it will be forced to aggressively diversify its seaborne oil imports.”

For inquiries, please contact wrampe@ierdc.org.