China’s state planner announced a substantial upward adjustment to the regulated ceiling prices for retail motor fuels, the largest such move since March 2022. The National Development and Reform Commission (NDRC) said retail price caps will rise by 695 yuan per metric ton for gasoline and by 670 yuan per metric ton for diesel, with the increases taking effect from Tuesday.
The regulator said the change follows recent volatility in global oil markets. International benchmark Brent crude futures rose by 27% last week, while West Texas Intermediate (WTI) futures advanced by 35.6% over the same period. The NDRC’s notice specified the new ceiling levels but retained the nationwide uniform adjustment policy that the state planner applies when it reviews domestic retail fuel prices.
The previous nationwide price adjustment was implemented on February 24. China’s price-review mechanism operates on a roughly 10-working-day cycle, during which the state planner reassesses and applies uniform retail adjustments across regions even though local benchmark prices can vary.
The NDRC said the rate of adjustment is determined by movements in international crude oil prices and also factors in average processing costs, tax liabilities, distribution expenses and an allowance for appropriate profit margins. Under China’s system, retail gasoline and diesel are permitted to fluctuate freely between predefined floor and ceiling levels.
The mechanism includes explicit constraints tied to extreme crude price levels. When international crude trades at around $130 per barrel, retail fuel prices are generally not increased or are raised only minimally. Conversely, if crude prices decline to $40 per barrel or below, retail fuel prices are calculated as if crude were priced at $40 per barrel, with normal processing margins applied.
Separately, in response to recent supply and refinery disruptions linked to the U.S.-Israeli war on Iran, Chinese authorities last week instructed refiners to stop exporting fuel and to attempt to cancel shipments that had already been committed, according to people with knowledge of the matter. That request came as refinery output was constrained by the broader regional conflict.
The notice from the NDRC reiterated the conversion rate used in official communications: $1 = 6.9185 Chinese yuan renminbi.
Contextual summary - The NDRC’s ceiling increase is aimed at reflecting higher international crude prices and domestic processing and distribution costs while adhering to the established price-adjustment mechanism. The move follows recent market turbulence and temporary export curbs imposed on refiners.