Gasoline prices are set for another increase on March 23, following a series of rises this year: 0.07 yuan per liter on January 20, 0.16 yuan on February 3, 0.14 yuan on February 24, and 0.56 yuan on March 9. The upcoming hike is expected to be the largest since China aligned its domestic fuel pricing mechanism with international markets in 1998.

According to JLC estimates, as of the ninth working day on March 20, the average crude oil price stood at $96.89 per barrel, with a change rate of 29.31%. This would translate to a retail price increase of 2,000 yuan per ton for gasoline and diesel. If calculated per liter, 92-octane gasoline is projected to rise by 1.6 yuan. For a typical private car with a 50-liter tank, this means an additional cost of about 80 yuan per refill—enough to buy five to six kilograms of pork. However, the final increase will depend on international oil price movements on the last working day.

Tensions between the U.S., Israel, and Iran in the Middle East show no signs of easing, with risks of further escalation. As the average international oil price continues to climb during the current adjustment cycle, a significant price hike on Monday appears certain, and the final increase may even exceed current estimates.

Drivers are advised to refuel this weekend to avoid long queues on March 23. Currently, retail prices in Zhejiang Province are 7.61 yuan per liter for 92-octane gasoline, 8.09 yuan for 95-octane, 8.86 yuan for 98-octane, and 7.28 yuan for 0-grade diesel. After the adjustment, 92-octane gasoline is expected to surpass 9 yuan per liter, while 98-octane may exceed 10 yuan. Refilling a 50-liter tank with 92-octane would cost over 460 yuan, and nearly 500 yuan for 95-octane.

Historically, Zhejiang’s 92-octane gasoline first exceeded 9 yuan per liter following the Russia-Ukraine conflict in 2022. It reached 9.29 yuan on June 14, 2022, before dropping to 9.03 yuan on June 28, and falling below 9 yuan on July 12. In total, it remained above the 9-yuan threshold for only 28 days. This time, after the March 23 adjustment, 92-octane is estimated to reach 9.21 yuan per liter. If the increase exceeds 1.6 yuan, it could challenge the historical high of 9.29 yuan.

Is there a cap on how high fuel prices can go? Yes, but the ceiling remains some distance away. China’s fuel pricing mechanism is linked to a weighted average of Brent, Dubai, and Minas crude oils. Retail prices are adjusted every ten working days based on international crude prices, plus domestic processing costs, taxes, distribution fees, and reasonable profit margins. Price adjustments are suspended if the change is less than 50 yuan per ton. When international crude prices fall below $40 per barrel, domestic prices do not decrease further. When they exceed $130 per barrel, price hikes are limited or postponed. Within the $40–$130 range, prices fluctuate normally.

Brent crude has recently traded above $100 per barrel. Analysis from Bernstein Energy suggests that if the Strait of Hormuz were blocked for one month, Brent could peak around $100 per barrel; a three-month blockade might push it to $140, and six months could drive prices as high as $170.