Can rising oil prices alleviate domestic price issues?

[Caixin] The surge in oil prices and the resulting rise in prices seem to align with the policy goal of “promoting a reasonable rebound in prices.” But what is the actual impact?

According to data from the National Bureau of Statistics, from January to February 2026, China’s CPI increased by 0.8% year-on-year, while PPI decreased by 1.2%, indicating that the GDP deflator for the first quarter may still be in negative territory. This year’s “Government Work Report” explicitly states the need to “push the overall price level from negative to positive and achieve a reasonable and moderate rebound in consumer prices,” a step further than last year’s statement of “keeping the overall price level within a reasonable range,” reflecting a clear policy direction to move out of low-price conditions.

Since the outbreak of conflict between the US and Iran on February 28, the war has lasted over half a month. The Strait of Hormuz, a critical global oil shipping route controlled by Iran, has been largely disrupted, causing intense market volatility. International oil prices have experienced a rollercoaster, currently stabilizing around the $100 mark after sharp fluctuations. As a result, since March 9, China’s gasoline and diesel prices have continued to rise, with the sixth price adjustment of the year scheduled for March 23, further increasing domestic fuel costs.