Country to cut oil, diesel prices due to international drops

China's top economic planner announced on Monday cuts in the price of gasoline by 365 yuan ($58.6) per ton and that of diesel by 350 yuan per ton, as international oil prices have kept falling recently.

This is the thirteenth consecutive cut in gasoline and diesel prices since July 2014.

After the adjustment, the retail price of gasoline will drop by 0.27 yuan per liter and that of diesel by 0.3 yuan per liter. The price adjustment takes effect starting Tuesday, the National Development and Reform Commission (NDRC) said Monday.

The fuel surcharge for domestic flights has also been lowered five times since September 2014 amid dropping oil prices.

The current pricing mechanism allows the NDRC to adjust oil prices every 10 working days based on changes in international oil prices.

The gasoline prices in most areas in China will drop below 6 yuan per liter after the adjustment, marking a near six-year low, wrote a research note from industry portal chem365.net on Monday.

The research note also said that international oil prices are not very likely to rebound in a short term as major oil-producing countries refuse to cut production, such as Russia and members of the Organization of Petroleum Exporting Countries. Also, oil demand remains weak amid the sluggish world economy.

Previously on January 12, the Ministry of Finance (MOF) announced a raise in the fuel consumption tax in order to save energy, as people tend to consume more amid low energy prices. The MOF has announced an increase in the tax three times since November.