It is reported that the National Development Reform Commission is researching on the reform of the oil pricing mechanism and will roll out the new mechanism once it obtains a consensus.

The NDRC had recently announced a cut of CNY 300 per ton for gasoline and diesel fuel effective yesterday marking a first price reduction for the past 16 months.

Mr Cao Changqing chief of the NDRC pricing department said the price cuts were not late as the conditions required for the price reductions were just met.

He admitted that the mechanism had its weakness, and more transparency would be helpful.

Mr Cao denied market opinion that oil prices were quick to rise but slow to drop. He added that China had postponed oil price hikes at times because of inflationary pressures and the impact on downstream businesses.

According to the regulations, the country will adjust oil prices when the 22-day moving average of international oil price fluctuations hit 4%.

(Sourced from stcn.com)