China to cut fuel prices for first time

China will cut state-set fuel prices for the first time since July, the government said yesterday, further easing inflationary pressure. The benchmark price for petrol will drop 3.5 percent to 8,530 yuan ($1,376) per ton while diesel will fall 3.7 percent to 7,720 yuan ($ 1,245) per tonne from Friday, the National Development and Reform Commission said. The cut will see petrol prices at the pump fall by 0.23 yuan per liter and diesel by 0.26 yuan per liter, in reflection of declining international crude prices, the top economic planning body said in a statement. The commission said international crude prices had trended down since it last raised domestic fuel prices in September, due to worries over the US economy and a slow recovery in the global economy. The agency can adjust fuel prices when international oil prices move by more than four percent over a 22-working day period. China is the world's second largest consumer of oil, but the government keeps a tight lid on domestic retail prices of fuel, in part to ease social discontent. China's inflation rate slipped to a nearly three-year low in October, leaving the authorities with room to take more steps to boost the recovery in the world's second-largest economy. The consumer price index rose 1.7 percent year-on-year in October, compared with an increase of 1.9 percent in September.