China imposes first cuts in fuel prices in 16 months

China will reduce retail prices for gasoline and diesel by 300 yuan (47 U.S. dollars) per tonne starting Oct. 9, the country's top economic planner said on Saturday.

The bench

mark retail price of gasoline will be cut by 0.22 yuan per liter and diesel by 0.26 yuan per liter, according to the National Development and Reform Commission (NDRC).

The decrease marks the first fuel price reduction since June 1, 2010. Over the past 16 months, the NDRC has raised fuel prices four times following escalating global crude prices.

But the international price of crude has fallen remarkably since August, dampened by the worsening debt crisis in Europe and United States and fears of a double-dip recession of the global economy. Despite that, China's domestic fuel prices has long remained intact and that aroused public complaints.

Cao Changqing, director of the pricing department of the NDRC, said the new price cut will lower social operational costs, reduce price hike pressures and promote steady and relatively fast economic development.

According to a statement posted on the NDRC's website, the NDRC will shorten oil price adjustment period and improve the pricing mechanism.

The mechanism reform is still under way and will be made public after consensus is reached, the statement said.