Domestic Oil Prices Dropped in Line with International Prices

Domestic oil prices dropped due to changes in international oil pricesFor the first time this year the oil and gas prices in the international market have dropped, bringing down the prices of gasoline and diesel in the city. According to the National Development and Reform Commission, wholesale prices for regular gasoline and diesel have decreased by 300 yuan per ton.

The decrease will cut retail prices for gasoline by .22 yuan per liter and diesel by .26 yuan per liter. The new price cut was a welcome change for Chinese commuters since fuel prices have reached their highest during the price hike in April and remained unchanged even with fluctuations in the international markets. Prices for international crude oil have continue to drop in trading over the past few weeks, prompting the fuel price drop in the city.

The high prices have already made consumers worry and brought pressure to the government to find ways to control price hikes. In 2009, the government engaged an oil pricing mechanism that allows adjustments in domestic refined oil prices whenever there were changes in the prices of international oil of more than 4 percent over 22 days.

Analysts are saying that changes should be made since the current pricing system has problems such as a lengthy cycle and transparencies resulting to the synchronization of domestic fuel prices with the international fuel prices.

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