Rising Oil Prices Impact On Prices In China

The petroleum, as the important strategic resource, has penetrated into the social, economic, production, all aspects of life. Petroleum has already transcended the category of primary product and Become the material base that human existence and national economic development needs. As the upstream industry of the national economy, the rising of petroleum resource will push the production material price levels in commodity market and directly cause downstream industry production cost increasing. Cost will be passed on to the consumer by Production enterprise, through improving product prices. It accordingly leads the rising prices, and even causes the domestic cost pushing inflation. The rising prices guides and enhances the liquidity and speculative of money, it can also bring a series of great influence to the national economy and the people life style.The article is based on the current energy price and the price rise in general, with the price of petroleum and the price level relations as the research object. It both researches petroleum price rises on effect of all departments product price level and researches petroleum price rises on effect of Chinese price level, the consumer price index and the producer price index.Firstly, thesis delivers a description to the fluctuation status and history review of petroleum prices, and understands the petroleum pricing mechanism of our country in various stages, and analyzes the price level status. It discusses the relationship between petroleum price and price level through analyzing the connectivity of them. On the analysis of the oil price rises induced the mechanism of rising prices, it describes the status of petroleum resources in energy and describes the relationship between the Oil department and other departments in national economy. Thesis interprets the propagation paths of petroleum price rises on effect of price through the supply and demand analysis about petroleum price on effect of domestic prices and the AD-AS analysis. Based on the42department input-output table in2007and Input-output extended table in2010, this thesis Constructs input-output influence model, and processes the empirical research to petroleum price rises on effect of all department product price level and domestic price level. The results show that the influence of petroleum price rising on all departments product price mainly focus on the second industry. The petroleum processing industry and gas production supply industry are the most affected departments. Second are energy conversion departments and chemical departments, and then are energy-hungry heavy departments. In the third industry, the most obvious affected department is the traffic transportation industry. The influence of petroleum price on the first industry is very limited. This paper mainly uses five price indexes to measure the overall level of prices in China. These price indexes are GDP deflator, producer price index (PPI), consumer price index (CPI), rural consumer price index and urban consumer price index. Through the input-output model of calculation, the results show that the influence of petroleum price rising on Chinese price level is actually not big. Finally, this thesis launches its suggestion on governmental policy about decreasing the affect of petroleum price fluctuation on that of the price level.