China raised its domestic oil prices 10% yesterday, one of the key factors in crude’s surge to over $95 per barrel. The move was actually designed to decrease global oil prices, the Wall Street Journal explains, by lowering demand. But Chinese refineries, usually stuck with low government-set prices for their product, leapt to acquire crude for the fuel-starved nation.
China’s oil hunger has been insatiable, thanks to rapid growth and subsidized prices. That’s lead to shortfalls across the country, with cars and trucks lining up even in traditionally oil-soaked Beijing. A man was even murdered Tuesday for cutting in line at a gas station. International oil prices have risen 30% since China last upped its prices in May 2006. Over the last 5 years, Chinese consumption has grown 8.7% a year, compared to 1.5% for the rest of the world.