January 18, 2006 Sharp LPG price rises force state to step in Regulator directs officials in deregulated areas to set up methods of intervention By ERIC NG Beijing has abandoned its hands-off policy on liquefied petroleum gas (LPG) prices after some sharp increases. In a circular posted on its website yesterday, the National Development and Reform Commission said governments in regions where prices had been deregulated must now set up intervention mechanisms to prevent sudden price surges . "When prices display unusual fluctuations, temporary price intervention must be executed in a timely manner by imposing limitations on distribution margins, price caps, price rise approval procedures and price increase registration procedures to stabilise prices," the industry regulator said. "The interests of consumers and producers must both be taken into consideration." The circular did not say how long the measure would be in force or give guidance on price ceilings, but the move could squeeze profit margins of distributors. It comes as LPG prices have more than doubled in the past three years following those of crude oil in
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