Drivers lined up at gas stations across China on Monday, as the country starts to feel the pain of the energy shock triggered by the Iran war.
China has a considerable crude stockpile and is swiftly electrifying its economy, but hundreds of millions of drivers who still rely on gas will likely feel the sting of higher prices.
Beijing on Monday said it would ease a planned hike in gas prices to “reduce the burden” on drivers, a surprise move signaling it is “deeply concerned about inflationary pressure and consumer affordability,” an oil analyst said.
While the oil price shock could help offset deflationary pressure in China, rising prices driven by higher input costs risks morphing into “bad inflation,” an economist said.