China will raise gasoline and diesel prices on Thursday to reflect higher crude prices, the National Development and Reform Commission said in a statement Wednesday.

The statement by the NDRC, the country's economic planning agency, confirms an earlier report by domestic energy information portal C1 Energy on Wednesday.

Gasoline retail prices will increase CNY500 a metric ton, while diesel's retail prices will rise CNY400/ton, the NDRC said. The move represents hikes of 5.6% and 4.9% over the current average gasoline and diesel retail ceiling benchmarks of CNY8,880/ton and CNY8,130/ton respectively, according to Dow Jones Newswires calculations.

However, analysts said, local fuel price increases will continue to lag international crude price gains due to the government's efforts to curb high inflation.

The NDRC said China has narrowed the magnitude of the fuel price increases and postponed the timing to alleviate its impact on the overall inflation.

China 's price increases demonstrate a difference of approach compared with South Korea --another major oil importer--where refiners recently announced cuts in domestic gasoline and diesel prices after coming under heavy pressure from the government, which is also worried about inflation and concerned about a lack of competition in the oil product markets.

The crude basket that NDRC tracks has rallied 14% since China 's last price increase in February, according to C1, on the back of continued military strikes in Libya , which disrupt oil exports from the country.

China will also raise the benchmark ex-factory price of No.3 jet kerosene by CNY500/ton to CNY6,840/ton from Thursday, it said.

Refining margins of Chinese companies such as China Petroleum & Chemical Corp. (SNP) and PetroChina Co. (PTR) may still be in the red this month even after such a price hike, said Shi Yan, an energy analyst at UOB KayHian Ltd.

In addition to inflation, the nation's fuel pricing mechanism also allows the government to cut refiners' margins when oil prices are between $80 and $130 a barrel and they won't be guaranteed any margin if prices rise above $130/bbl, Shi said.

China 's consumer prices rose 4.9% in February from a year earlier, unchanged from January's 4.9% rise but above the government's full-year target of a 4% increase.

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