China has set to increase the prices of cleaner fuel before the year ends, making its intent clear in cleaning up its air by easing out on its coal usage.

The country's National Development and Reform Commission (NDRC) on Monday said it approached state domestic refiners to hasten the improvements of their respective plants so that they can immediately jack up the necessary production.

However, without sufficient national subsidies as well as the state's manipulative control on fuel prices, oil refining firms remained wary the costly plant improvements would lead them to incur heavy losses.

Like many gasoline stands in Japan, this station has hoses that hang from above.

But the NDRC countered it will be the Chinese consumers that will be made to bear the brunt of the costs, which will be a whopping 70 per cent, local media reports said, quoting a statement from the commission.

Prices for automotive diesel and gasoline, for instance, has been pegged to go up by 290 yuan (AU$50.34) and 370 yuan (AU$64.23) per tonne, respectively. The new prices of automotive gasoline will come into effect by year end, while that of diesel will be in late 2014.

China is aiming to compulsorily implement the new national V standards by end 2017. The national V standards is similar to Euro V which has a no greater than 10 ppm sulphur content.

Since January, when China experienced its worst yet thick, toxic smog that covered Beijing and much of northern China, the federal government had been racing and promulgating measures to reduce the country's mighty air pollution.

A "No Smoking" sign at a gas station

Emissions from poor quality diesel contribute much to the country's urban air pollution.

China's diesel market consumes about 3.6 million barrels daily.

With China's waning coal appetite, global consumption of the commodity, according to the most recent coal-market report released by the International Energy Agency, could grow only to a dismal 2 per cent annually through 2017, making coal miners in Australia at risk.

By the year 2035, the IEA sees China's coal demand will only reach 3.66 billion tonnes maximum.