Gasoline and diesel retail prices rose by around 3 percent on Tuesday to reflect global market fluctuations, according to the National Development and Reform Commission (NDRC), the country's top economic planner.

Gasoline prices would go up by 230 yuan (US$34) per ton, and diesel prices by 220 yuan per ton, the NDRC said on Monday. Following the adjustments, gasoline prices are now 7,420 yuan per ton with diesel trading at 6,680 yuan per ton.

It is the second price hike this year.

The move is in line with global oil prices that have increased by more than the 4 percent threshold since the end of September, an NDRC official, who declined to be named, said.

Under a 2009 pricing mechanism, the government considers adjusting domestic refined oil prices when international oil prices change more than 4 percent within 22 working days.

Under the system, China adjusted fuel prices three times this year, with two price hikes and one reduction.

The government adjusted oil prices eight times in 2009.

"The latest price rise is moderate and within market expectations," said Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University.

Compared to coal that accounts for around 70 percent of the country's energy consumption, oil plays a smaller part in the mix and the hike will not dramatically affect the consumer price index (CPI), said Lin.

The NDRC said on Monday that a new price mechanism is expected to be finalized by the end of the year.

"The new regime will be more flexible in reflecting market changes and reducing manipulations, eventually forming a market-oriented mechanism," the NDRC official said.

(China Daily October 26, 2010)