Beijing: China will cut retail ceiling prices for gasoline and diesel by about 3% from Sunday, the first price cut this year, taking prices off record highs at a time when headline inflation eased from three-year highs.
Citing the National Development & Reform Commission (NDRC), the country’s macro policy maker, official news agency Xinhua said the price cut would be ¥300 per ($47) per tonne, confirming an earlier industry report.
China sets its retail fuel prices by tracking the prices of a basket of international crude over a 22-working-day cycle. A price change is usually triggered when global oil prices move beyond a 4% range during this period.
According to C1 Energy, which closely tracks the basket of crudes - Dubai, Brent and Cinta - global oil had fallen 4.09% during the 22-day cycle by 7 Oct.
China last changed prices on 7 April, with a hike of around 5%, which brought prices to record levels.
The price cut, announced the first day government offices returned from a seven-day national holiday, came after China’s inflation pulled back to 6.2% in August from a three-year high of 6.5% in July and is widely expected to cool steadily for the rest of the year.
The modest price cut may help lift fuel demand in the world’s second-largest oil user, which appears on track to deliver annual growth of around 6% this year.
The International Energy Agency last month pegged China’s oil demand growth at 527,000 barrels per day this year, contributing more than half of the world’s incremental demand.