CNOOC's oil and gas extraction facility (Photo/CNOOC)

 
China will give phased price subsidies to domestic oil refining companies in a bid to safeguard stable supplies of processed oil and reduce the operating costs in the real economy, according to a statement published by the Ministry of Finance (MOF) on Wednesday. 

The subsidies will be issued when international crude prices surge above the upper limit of China's processed oil price stipulated by the government, which stands at $130 per barrel, the statement noted.

With the subsidies, the price of processed oil won't increase at the market end. 

China's oil price has repeatedly increased this year against the background of surging global energy prices amid the Russia-Ukraine conflict. On June 14, China's processed oil price rose for the 10th time this year, with the price of gasoline rising 390 yuan ($58.2) for each ton.

According to the MOF statement, the policy's duration time is temporarily set at two months. If international crude prices continue to remain higher than the upper limit of China's stipulated processed oil price, China will arrange relevant regulatory policies in response. 

The subsidies will be calculated every 10 working days, and the subsidy amount will be based on companies' actual sales volume of gasoline and diesel oil.

Global oil prices have continued to show a rising tendency, particularly after leaders of the Group of Seven (G7) nations said recently they will explore a potential ban on transporting Russian oil that has been sold above a certain price as a kind of sanction against the country.  

The Brent Crude Oil Continuous Contract rose by 0.43 percent to $114.29 per barrel by 10:31 am on Wednesday, according to the latest data displayed on marketwatch.com.