On April 21st at 24:00, China's domestic refined oil product prices are scheduled for adjustment. The current 10-working-day statistical cycle for oil prices has now completed 30% of its duration. Influenced by a significant drop in international crude oil prices, the current crude oil change rate has reached -3.19%, indicating an expected price reduction of 270 yuan per ton. Based on the current anticipated decline, prices for gasoline and diesel are projected to fall again by 0.21 to 0.24 yuan per liter.
How are China's domestic refined oil product prices adjusted? The fluctuations in oil prices are a matter of public concern. The pricing mechanism is primarily based on the "Petroleum Price Management Measures" issued by the National Development and Reform Commission in 2016. As a major petroleum importer with over 70% of its crude oil sourced externally, China's system links domestic gasoline and diesel prices to international crude oil prices, with adjustments made every 10 working days based on changes in the international market.
This mechanism has three key components. Firstly, domestic prices are pegged to the average price of a "basket" of international crudes, meaning adjustments are influenced by multiple international benchmark prices, not just one. Secondly, the magnitude of the price adjustment is determined by comparing the average price of this basket over the preceding 10 working days against the average from the prior 10-working-day period before the last adjustment, rather than by short-term price movements. Thirdly, "interval-based control" measures are implemented under specific circumstances to stabilize prices.
In recent years, domestic refined oil prices have fluctuated according to this mechanism. There were 10 increases, 12 decreases, and 3 holds in 2023; 9 increases, 9 decreases, and 7 holds in 2024; and 7 increases, 12 decreases, and 6 holds in 2025.
Recently, international crude oil prices have experienced significant volatility. Notably, prices for Middle Eastern crude have repeatedly hit record highs. These factors have directly increased China's import and fuel costs, leading to an overall upward trend in domestic refined oil prices recently.
Under what conditions are price control measures implemented? According to the existing mechanism, when the average price of the international crude basket exceeds $130 per barrel or falls below $40 per barrel during the 10-working-day period before an adjustment, the government will implement price control measures. Even if the $130 "ceiling price" has not been breached, temporary controls can be applied in special circumstances, such as significant domestic inflation, major emergencies, or abnormal fluctuations in the international oil market, as stipulated in the regulations. These temporary controls, while maintaining the fundamental pricing framework, help mitigate the impact of abnormal international price surges, alleviate the burden on end-users, and support stable economic operation and social welfare.
For instance, during an adjustment on March 23rd, the prices for the "standard products" – 92-octane gasoline and 0-grade diesel – should have increased by 2,205 yuan and 2,120 yuan per ton, respectively. After control measures were applied, the actual increases were 1,160 yuan and 1,115 yuan per ton. Translated into per-liter prices, this meant increases of approximately 0.87 yuan for 92-octane gasoline and 0.95 yuan for 0-grade diesel, representing a reduction of about 0.85 yuan per liter compared to the unadjusted increase. In another control instance on April 7th, the per-liter increase for 92-octane gasoline was reduced by 0.31 yuan and for 0-grade diesel by 0.32 yuan.
What measures would be taken if international crude oil prices rise sharply in the future, potentially exceeding the control ceiling? If the average price of the international crude basket continues to rise significantly, surpassing $130 per barrel, it would trigger the upper price control limit. For prices above this ceiling, the maximum retail prices for domestic gasoline and diesel would either not be increased or would be increased by a lesser amount. Concurrently, to ensure stable supply, the state might implement supportive fiscal and tax policies for the industry. A precedent was set in 2022 following the Russia-Ukraine conflict, which caused a sharp spike in international oil prices. At that time, when prices exceeded the $130 control ceiling, domestic refined oil prices were not raised for a short period, and phased subsidies were provided to refining enterprises.
Authorities have stated they will guide major producers and sellers to ensure the stable production and distribution of refined oil products, guarantee market supply, and strictly adhere to national pricing policies. Local departments are urged to strengthen market supervision, severely penalize violations of price policies, and maintain normal market order. Consumers can report any related price irregularities through the 12315 platform.