Beijing has upped its fuel prices for the second time in about three months as the global crude oil price hit an eight-month low - all for promoting better air quality.

From Oct 7, the retail benchmark prices for petrol and diesel in Beijing will be upped 200 and 290 yuan per ton respectively.

The announcement was posted on the official website of Beijing macro-control watchdog - Beijing Municipal Commission of Development and Reform (BMCDR) on Monday.

The BMCDR said the price hike was meant to compensate the increased cost in processing cleaner fuels conforming to Euro IV standard, which leads to lower pollutant emission and more environmental friendly.

The fuel price rise was only limited to Beijing, the capital city of China, which is taking the lead and setting an example for encouraging the use of greener fuel.

Since earlier this year, in an effort to improve Beijing's air quality for the Olympic Games, the Chinese government had decided to introduce cleaner fuel standard but temporarily retaining the existing fuel prices.

However, the new standard incurred higher cost for oil companies to process better quality and less polluting fuel.

In June, the Chinese government had already raised petrol price by 1,000 yuan per ton nationwide, but the reason stated then was to alleviate the pressure of rising global crude oil prices on local refinaries.

At that time, the global crude oil price reached around 132 US dollars per barrel; however, the latest price bump came at a time when the international rate had dropped to below 88 US dollars per barrel, a new low in eight months amid fears that the financial crisis in the United States could worsen and affected global economies. 

The BMCDR announcement said retailers could set their own retail prices within 8% of floating range based on the benchmark price.

Based on the newly revised benchmark, China's oil giants - Sinopec and PetroChina - had upped the Grade 93 petrol, a product widely used by private vehicles, by 0.17 yuan to 3.67 yuan per liter; meanwhile, the Grade 97 petrol was raised to 6.78 yuan from 6.60 yuan per liter.

In addition, the Grade Zero diesel price jumped by 0.27 yuan to 6.50 yuan per liter.

The municipal government said in order to minimize the impact of price hike to public industries, the government would extend subsidies to agriculture-related, urban public transportation and other industries closely linked to public interests.