Jan. 15, 2007 (China Knowledge) – China has cut the retail price of petrol for the first time in nearly 19 months. Petrol prices were cut by 3.8%, or RMB 220 a ton from yesterday, the National Development and Reform Commission (NDRC) said on its website.

The reduction in petrol prices will benefit the relatively affluent drivers in China's cities although the news will not be welcomed by oil refiners who have been forced to process at a loss for over a year. Ex-refinery prices for jet fuel were trimmed by RMB 90 a ton, NDRC top planner said, just days after international crude oil prices hit a 19-month low.

Although the price of diesel was unchanged, the price cut will appease consumers who were frustrated that pump prices were unchanged as global markets fell.

Government officials have pledged to eventually liberalize prices, though there is yet to be a scheme to link domestic fuel prices with global crude costs, and it is not sure when the authorities will start working on it.