OREANDA-NEWS. July 16, 2012. China has cut gasoline and diesel prices per ton by RMB 420 (USD 66.45) and RMB 400 (USD 63.29), respectively, effective Wednesday, the National Development and Reform Commission (NDRC) announced.

The NDRC currently adjusts gasoline and diesel prices after crude oil prices move four percent over 22 consecutive working days. As of Monday, the average price of Brent, Cinta and Dubai crude oil had fallen 9.33 percent.

Gasoline and diesel are RMB 0.31 (USD 0.05) and RMB 0.34 (USD 0.05) cheaper, respectively, per liter after the reduction, oil analyst Lv Jianfeng told Interfax.

“Average retail prices of gasoline and diesel in most cities are now below RMB 7 (USD 1.1) per liter,” said the Beijing-based analyst.

The scale of this latest fuel price cut, the third in as many months, is smaller than the market was expecting. The last downward price adjustment saw retail gasoline and diesel prices reduced by RMB 530 (USD 83.25) and RMB 510 (USD 80.11) per ton, respectively, following a 9.4 percent decline in the price of the three types of crude.

“The lower than expected price adjustment may be seen as Beijing’s way of assuring oil refineries,” said Lv.

Stockpiles of oil products at refineries have been building and prices have been falling as a weak economy and expectations of a cut in retail fuel prices led to thin trading in wholesale markets, Interfax reported previously. Some refineries in the south have brought forward maintenance plans in order to reduce gasoline and diesel supplies.

Shanghai Stock Exchange-listed China Petroleum & Chemical Corp., the country’s largest producer and supplier of refined oil products, was trading a touch above its 10-month low share price midday on Wednesday after falling 0.68 percent in the morning session. Shares have declined 19 percent this year.

In effect since 2009, the current pricing mechanism has drawn criticism that it is quick to increase fuel prices but slow to lower them. The central government is exploring potential reforms to make the system follow international crude prices more closely and to increase transparency.