I wonder how much of a difference this might make to the price of crude?

http://money.cnn.com/2008/06/19/mark...ion=2008061910

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The world breaks everyone and afterward many are strong in the broken places. ~ Ernest Hemingway ...

It would depend on how much "casual" use there is vs "productive" use.
When I use those words, I'm equating my personal life as driving to work as productive use and going to visit a friend as casual use.

Industrial uses are usually productive, but the efficiencies are usually controlled no matter what the cost, unless there is some other trade-off.

I suspect it will help, but I feel that it's not going to be a large amount.

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Numbers are not case sensitive. (me)

8% price increase, assume elasticity of 0.06, China uses 6.5 million barrels a day, that will result in a reduction in use of 390,000 barrels a day, which is about half a percent of world oil use. That's a significant amount, but don't get too excited and buy a hummer or something.

The big shock that took the markets by surprise was that analysts expected China to wait until after the Olympics! Markets react badly to surprises.

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Any day you wake up on "the right side of the dirt" is a good day.

T. Anderson

so the speculators are now looking at it as a reason to drive crude prices up.....we just can't win

http://money.cnn.com/2008/06/20/mark...ion=2008062009

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The world breaks everyone and afterward many are strong in the broken places. ~ Ernest Hemingway ...

How exactly does the Chinese government set the price of gasoline? Do they buy oil at market rates and sell it to the refiners at a discount (essentially paying the difference with tax revenues), or do they let refiners buy at market rates and force them to sell at a fixed price (limiting profits and potentially forcing the refiners to lose money)?

I really should have taken some economics electives in school.

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"That's Not Blight. It's New Jersey" - The Wall Street Journal

If a big storm happened the witchdoctors would say that it's because the gods are angry. The price of oil changes and financial writers say it's because of China. The fact is humans like explantions and insist on making them up even when they have no evidence what caused a change and it known that there is a large random element. An 8% increase in oil prices in China should cut prices by much less than a dollar a barrel, yet it gets credited with a $5 drop. Now its being blamed for pushing prices up. People just like making stuff up.

The short answer is that the gov't owns everything between the ports and the pumps. They buy the crude on the open market, refine it, ship it and then sell at whatever price they choose.

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Any day you wake up on "the right side of the dirt" is a good day.

T. Anderson