China will not increase fuel prices in the country if oil prices exceed $130 on the global market, but instead will subsidize them, the finance ministry announced Wednesday.
The country conveyed a plan for fuel price subsidization to ensure a safe and stable supply of refined petroleum products, reduce the operating costs of the real economy and ease the burden on consumers.
China will apply a progressive price subsidy for refineries if crude oil prices on the international market exceed the upper limit of the national regulation on refined oil prices in excess of $130 per barrel.
The price of Brent traded at $113.36 per barrel at 0900 GMT on Wednesday and American benchmark West Texas Intermediate (WTI) crude oil cost $111.42.
Meanwhile, China decided to lower gasoline and diesel retail prices starting Wednesday.
According to the National Development and Reform Commission, gasoline and diesel prices will go down by 320 yuan ($47.70) per tonne and 310 yuan ($46.20) per tonnes, respectively.
Under the current pricing mechanism, if international crude oil prices change by more than 50 yuan ($7.40) per tonne and remain at this level for 10 working days, the prices for refined petroleum products in China will be adjusted accordingly.
By Zeynep Beyza Kilic