China Caps Fuel Price Hikes to Cushion Global Oil Volatility

China will keep controls on retail gasoline and diesel prices from Wednesday, April 8, to cushion the impact of volatile global oil markets, according to the National Development and Reform Commission. The move follows “significant fluctuations” in international crude prices since late March. Under Beijing’s pricing formula, fuel prices would have risen sharply, by CNY 800 per tonne for gasoline and CNY 770 for diesel, but the government limited the increases at CNY 420 and CNY 400, respectively. Authorities also instructed major state oil firms, including China National Petroleum Corporation, China Petrochemical Corporation, and China National Offshore Oil Corporation, as well as other refiners, to maintain output and logistics to ensure a stable domestic fuel supply.

China’s annual inflation jumped to 1.3% in February 2026 from 0.2% in January, marking the highest print since January 2023 and topping market expectations of 0.8%. The increase largely reflected the impact of the Lunar New Year, which fell in mid-February this year. Food prices logged the sharpest rise since October 2024, rebounding from a prior decline (1.7% vs -0.7% in January), boosted by an acceleration in the cost of fresh vegetables and a softer drop in pork prices. Non-food inflation picked up strongly (1.3% vs 0.4%), with upward price pressures coming from clothing (1.9% vs 1.9%), healthcare (1.9% vs 1.7%), and education (2.0% vs flat reading). Meantime, transport costs fell much more slowly (-0.7% vs -3.4%), even as a drop in housing prices accelerated a bit (-0.2% vs -0.1%). Core inflation, excluding food and energy, rose 1.8% yoy, the strongest since March 2019. Monthly, the CPI rose 1.0%, up from 0.2% in January and pointing to the largest monthly gain since February 2024.

China’s annual inflation eased sharply to 0.2% in January 2026 from 0.8% a month earlier, marking the lowest print since October and missing market expectations of 0.4%. Food prices fell for the first time in three months (-0.7% vs 1.1% in December), dragged by drops in pork, eggs, and cooking oils. Non-food inflation slowed (0.4% vs 0.8%), despite ongoing consumer trade-in programs. Healthcare inflation slowed slightly (1.7% vs 1.8%), education cost was flat after a 0.9% rise previously, while housing (-0.1% vs -0.2%) and transport (-3.4% vs -2.6%) saw further declines. Clothing prices, however, accelerated (1.9% vs 1.7%). NBS statistician Dong Lijuan said the moderation in January inflation was mainly due to a high base and sharper energy price drops. Meanwhile, core inflation, excluding food and energy, rose 0.8% year-on-year, the weakest in six months after 1.2% in December and November. Monthly, CPI increased 0.2%, matching the December level but undershooting the 0.3% consensus.