Retail oil price cut after three rises

A worker fills up a car with fuel at a gas station in Lianyungang city, East China's Jiangsu province, Feb 9, 2015. [Photo/Xinhua]

The National Development and Reform Commission, the nation's top economic planner, said on Monday that retail prices of gasoline would be cut by 110 yuan ($17.78) a metric ton, or 0.08 yuan a liter from Tuesday, while diesel prices would decline by 105 yuan a ton, or 0.09 yuan a liter.

After the retail price cut, the benchmark price of 90-octane grade gasoline will be 5.96 yuan a liter.

The domestic fuel price has been raised three times in a row during the previous pricing adjustments and the last cut was on March 27.

By far this year, oil retail prices in China have seen five hikes and four cuts.

Affected by fuel price cut expectation, the wholesale market has been weak in past weeks and the prices of diesel and petroleum both declined, said Liang Dan, senior analyst with ICIS Energy, a Shanghai-based energy information consultancy.

Li Yan, a crude oil analyst at domestic consultancy Shandong Longzhong Information Technology Co, said the global crude supply glut still exist, which is likely to keep the price at a low level.

"Meanwhile, Saudi Arabia and the United States' crude output is at the record high, which adds more worries to traders in the market," he said.

Li estimated that the domestic retail price will be cut again during the next pricing adjustment which is scheduled on June 23.

Xue Qun, an oil product analyst at the consultancy, said fuel costs for family drivers will fall by 3 yuan per 500 kilometers. Logistics companies will pay an 35 yuan less per 1,000 kilometers to fuel the trucks.