Because of a drop in international oil prices, Chinese motorists may pay less for diesel and gasoline at pumps this week.
Last Friday, May 25th, Brent crude, one of the domestic oil price indicators, got lower than US$100 per barrel, which also gave hope that the retail prices will also fall. Analysts predict that gasoline and diesel prices will fall on June 8th, that is 22 days after the last reduction. Index tracking prices of Cinta, Dubai and Brent crudes have already decreased with 6% since China lowered the prices for fuel on May 10th, the first time in the last 6 months.
Han Jingyuan, an analyst with JYD Online Co, said that if the price is reduced, this means that gasoline price will decrease with 0.47 yuan and diesel with 0.55 yuan a liter. This would mean twice the cut in May, which lowered 93-octane gasoline price at Shanghai pumps to 8.01 yuan from 8.27 yuan a liter, and diesel to 7.92 from 8.19 yuan.
China’s fuel pricing mechanism was introduced in 2009 and allowed the National Development and Reform Commission, to adjust fuel prices whenever the international crudes basket goes above 4% over 22 working days.