China lowers gasoline and diesel price caps as global oil retreats from war peaks, offering relief to consumers and refiners
BEIJING: China will lower domestic retail price caps for gasoline and diesel from Tuesday night. This marks the first fuel price cut this year as global oil prices retreat from peaks reached during the Iran war.
The reduction will save a private car owner about $3.23 to fill a 50-litre tank of 92-octane gasoline. Beijing had raised maximum retail prices three times since March as the conflict sent oil prices soaring.
Retail gasoline and diesel ceiling prices will fall by 555 yuan and 530 yuan per metric ton, respectively. China’s National Development and Reform Commission (NDRC) announced the adjustment.
High prices had sharply curbed retail consumption, leading to a surge in inventories at independent refineries. Widespread wholesale price cuts were initiated to clear stocks, according to Chinese consultancy Oilchem.
The NDRC reviews and adjusts retail fuel prices every 10 working days. Its formula reflects changes in global crude prices, accounting for processing costs, taxes, distribution expenses and profit margins.
China last raised maximum gasoline and diesel prices on April 7. Those increases were 420 yuan and 400 yuan per ton, respectively.
Oil prices have fallen from peaks seen earlier this month after the US and Iran reached a temporary ceasefire. The outlook has since turned more uncertain again.
Iran condemned the US for what it called an attack on the Iranian commercial vessel Touska. This raised fresh doubts over whether the ceasefire agreement will hold.
The US has maintained its blockade of Iranian ports. Iran lifted and then soon reimposed its own blockade of the Strait of Hormuz, which typically handles roughly one-fifth of the world’s oil and LNG supply.
Another month of disruption in the strategic waterway could push oil prices toward $110 a barrel in Q2 2026. Citi analysts provided this forecast.
