Possible cut in oil product prices imminent: analysts

A potential cut in domestic oil product prices is imminent, analysts said yesterday, given continuing weakness in the international crude oil market and poor global economic data.

By Wednesday, the weighted average crude oil price of Brent, Dubai and Cinta had fallen by 3.2 percent from the weighted average price on March 19, data compiled by C1 Energy, a Guangzhou-based consulting firm focusing on the oil sector, showed yesterday.

"A window for a cut in oil product prices in China will appear between May 10 and 15, if the international crude oil prices continue to decline," said Li Li, an analyst at C1 Energy.

The crude oil market as well as the general commodities market has been weak since April, due to on-and-off signs of recovery in the US and a slowdown in demand from China, Li said. "It's very likely the oil price will keep going down."

According to the oil product pricing mechanism set by the National Development and Reform Commission (NDRC), the country's top economic planner, domestic gasoline and diesel prices will be adjusted if the international benchmark price rises or falls by 4 percent over 22 working days.

The NDRC last hiked gasoline and diesel wholesale prices by 600 yuan ($95.25) per ton on March 20, driving gasoline pump prices in Beijing to over 8 yuan a liter.

This has caused much concern about energy inflation and its negative impact on the overall economy, and research by the National Bureau of Statistics (NBS) earlier this year showed that rising oil prices would feed into headline inflation growth.