The National Development and Reform Commission said in a statement on its website that local officials should closely monitor liquefied petroleum gas and natural gas, whose prices were not increased.

Local governments should also encourage producers to cut their costs rather than pass on rising prices to consumers, according to the statement, which was posted over the weekend.

Inflation has emerged as a top policy concern in Beijing, with increases in the consumer price index near 12-year highs.

China's inflation rate was 7.7 percent in May, easing only slightly from April's 8.5 percent, according to previously released data.

Analysts have said they expect manufacturers will be able to absorb the higher fuel costs in the short term.

Public transport fares including for buses, taxis and the railway should not be raised for the time being, and more subsidies should be allocated to taxis to cover losses incurred from rising fuel costs, the statement said.

Beijing announced retail petrol and diesel price hikes on Thursday as it seeks to close the gap between state-set domestic caps and soaring world oil costs.

China's oil giants saw little incentive to increase production to meet surging demand as they were said to be selling refined products at a loss, although it remains unclear if the price hikes have put them in the black.

But economists said the hikes should prevent shortages as the country prepares to host the Olympics in August.

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