China cut gasoline and diesel prices by 220 yuan per ton, or 3 percent, effective today, to reflect the drop in international crude prices.
This equals price cut of 0.16 yuan per liter in gasoline prices and 0.19 yuan per liter in diesel prices. It is the second price cut on fuel prices this year.
The price cut was in response to recent falls in global crude prices, according to the National Development and Reform Commission (NDRC), the country's top economic planning body.
China adopted a new oil pricing system this year, under which domestic fuel prices would be adjusted when the moving average of a basket of international crude (Brent, Dubai and Cinta) changes more than 4 percent over a period of 22 working days.
According to CBI China, a domestic commodity information provider, by the end of July 27, the moving average of crude prices in Brent, Dubai and Cinta went down by 5.29 percent from last price adjustment on June 30.
"This round of fuel price adjustments is not surprising," said Zhong Jian, analyst with the Shanghai-based oilgas.com.cn,
Zhong last week said the government would cut fuel prices by around 200 yuan per ton at the end of July.
"There is no doubt that the government will change fuel prices more frequently this year," said Lin Boqiang, professor, Xiamen University.
According to CBI China, this round of price adjustment will have little impact on the country's two oil majors, PetroChina and Sinopec.
China raised fuel prices twice in June. After the two adjustments the price of 93 octane gasoline in Beijing was 6.37 yuan per liter, the highest level in history. The last two price rises evoked widespread complaints from domestic consumers, who felt that fuel prices are too high and unaffordable.
An industry insider, who asked not to be named, told China Daily that domestic fuel prices are almost on par with the prices in last July, when international crude prices were at the highest level. Such pricing system does not reflect global oil prices well, he said.