Taiwan comparison points toneed for fuel pricing reform (2)

That was true, it added, despite a modest retreat in crude prices in recent days.

Last Thursday, the 22-day moving average of the crude benchmarks was 5.14 percent higher than its level when China last adjusted prices in November, according to consultancy ICIS C1 Energy. The government doesn't publish its formula for calculating the moving average.

Taiwan's CPC, on the other hand, reviews pump rates weekly, under a published formula.

It attributed the latest reductions at the pump to a decline in global prices amid higher crude inventory in the US, expectations the Federal Reserve might begin to rein in its loose monetary policy, a rally in the US dollar and speculation that Saudi Arabia may ramp up production.

Actually, the mainland's commission could have raised fuel prices earlier because the trigger point was first reached as early as February 15, according to C1 Energy data.

The commission is believed to have refrained from any action until after Sunday's Lantern Festival to mitigate the impact of higher costs on the public.

Fuel demand usually remains high until the Lantern Festival, which marks the end of China's lunar New Year celebrations and the return to the cities of rural migrants from across the country.

Commission officials probably are now wishing they had acted earlier, which might have saved them from the Taiwan comparison and the resulting public outrage.

What is really needed is an overhaul in the way the mainland prices fuel.

NDRC officials have for a long time promised to make adjustments in the pricing system, first introduced in late 2008. The goal is to make the system more transparent, predictable and reflective of actual market costs.

A new mechanism is expected to remove the 4 percent threshold and shorten the 22-working day adjustment period to 10 working days, according to analysts and industry officials.

While 2012 was a letdown for those advocating energy-pricing reforms, some analysts expect the pace of change to pick up when a new government is installed at next month's National People's Congress.

Fuel pricing reform is expected to be near the top of the agenda.