China Sees Further Oil Price Cuts at Pump Stations
Retail gasoline price have been reduced by 240 yuan a metric ton or by 0.18 yuan per liter and diesel by 230 yuan per metric ton or 0.2 per liter. Just after the retail price cut the benchmark price of a 90 octane grade gasoline is at 5.73 yuan a liter.
The price change is due to the ongoing fluctuations in the global crude prices, in which China’s top economic planner and the National Development and Reform Commission raised the retail fuel prices twice and cut them twice just before this newest reduction. Just after global crude prices have started to plunge in June, retail fuel price was cut around eleven times in succession in just the second half of last year.
An oil analyst from a domestic data consultancy firm Shandong Longzhong Information Technology said that this latest round of cuts will allow drivers using family sized vehicles around 7 to 10 yuan per 500 kilometers. Drivers of commercial vehicles is expected to save 70 yuan per 1,000 kilometers. The price cut will also benefit the domestic transportation and aviation industry since it will be reducing fuel costs, although oil companies will be hit by lower refining prices and weaker downstream demand.
China used its current retail fuel pricing mechanism since March 2013 as price adjustments linked to world oil prices and there were changes made almost every ten days. During the past two years there were 24 cuts and 13 increases in fuel prices. After all the adjustments gas prices have been cut by 2,435 yun a ton and diesel by 2,655 yuan a ton. And in 2014 China Petroleum Enterprise Association said retail oil prices had four increases and 15 cuts.
According to the China Petroleum Enterprise Association, China’s retail oil prices had four rises and 15 cuts in 2014.