Ride-hailing driver Zhang Wuyou took comfort in having filled up his tank hours before fuel prices rose in China at midnight on March 24.
A few hours later, and he would have paid about 45 yuan (RM26) more for that 50 litre tank – roughly the cost of two bowls of Shanxi knife-shaved noodles, which keep him going between runs, just as petrol keeps his car running.
“Business is so bad now that every yuan counts.
Despite his gripes, Zhang is at least thankful for one small mercy – China’s top economic planner has stepped in to soften the blow of surging oil prices.
On March 23, the National Development and Reform Commission (NDRC) invoked a 13-year-old emergency provision for the first time to cap the rise in retail fuel prices, blunting the pass-through of global oil gains.
Since the US-Israeli strike on Iran in late February, the conflict has almost brought traffic through the Strait of Hormuz to a standstill.
The disruption to this choke point, which carries about a fifth of global oil supply, has sent prices soaring.
As the world’s largest oil importer, China is acutely exposed. It relies on imports for 70% of the oil it consumes, with roughly half of these supplies passing through the strait.
Yet, Beijing appears to be better placed than many other countries to weather the shock.
Because China’s main oil companies are state-owned, they must comply with the price cap, absorbing part of the higher costs themselves.
Under China’s pricing mechanism, fuel prices are adjusted every 10 working days in line with international crude benchmarks, but regulators can step in when swings are too sharp.
Beijing had not previously activated this intervention provision since it was introduced in 2013
When it finally did so in March, the NDRC capped the increase at roughly half what it could be under a formula. Petrol prices rose 1,160 yuan to 9,905 yuan per tonne, instead of rising 2,205 yuan.
The NDRC’s move is merely a Band-Aid. Beyond the emergency price cap lies a decades-long effort by Beijing to insulate the world’s second-largest economy from the volatility of global energy markets.
One pillar of its strategy is stockpiling. Since the early 2000s, China has built up strategic and commercial oil reserves.
Columbia University’s Center on Global Energy Policy estimates that as at March 2026, China holds about 1.39 billion barrels in storage – enough to cover roughly 120 days of imports at 2025 levels.
Another pillar is diversification. China draws crude from a broader mix of suppliers, with Russia now its biggest source.
Iranian authorities have also allowed ships from “friendly” countries, including China, to continue transiting the strait under specific coordination arrangements. At least three ships from China have passed.
At the same time, China has been reducing its reliance on oil altogether. Years of heavy investment in wind and solar have reshaped its power mix. Non-fossil sources now account for about 55% of installed power capacity and generate more than a third of total output.
Taken together, these measures help explain the orderly queues that formed at petrol stations on the evening of March 23, with no scramble to hoard fuel.
For now, the impact of the global oil shock has yet to cascade throughout wider Chinese society. Most urban commuters find the higher fuel cost tolerable.
The pain is concentrated in the transport sector. Ride-hailing and truck drivers, whose margins are thin to begin with, are feeling the pinch.
Lu, a long-haul truck driver who gave only his surname, said the fuel hike is just one of many pressures weighing on his livelihood.
“Life has gotten harder, but we’ll just have to deal with it.” — The Straits Times/ANN
