China's National Development and Reform Commission will not adjust the regulated prices of gasoline and diesel in what would have been the first such exercise following the new pricing mechanism introduced late last month, the NDRC said Wednesday.
In a statement on its website, the NDRC said international crude prices have been largely flat since the last price adjustment on March 27, when it reduced benchmark retail gasoline and diesel prices by Yuan 310 ($50)/mt and Yuan 300/mt, respectively.
The NDRC's new refined product pricing mechanism was introduced on March 27 to bring domestic gasoline and gasoil prices more in line with crude procurement costs. Under it, regulated oil product prices will be automatically adjusted every 10 working days in line with international crude price fluctuations, unless the resulting price change is smaller than Yuan 50/mt, roughly equivalent to $1/barrel.
Under the previous system, domestic oil product prices were reviewed every 22 working days if a basket of benchmark Cinta, Dubai and Brent crudes rose or fell by at least 4%.
The NDRC said Wednesday that according to its estimates, the latest change in refined product prices was less than Yuan 50/mt and so there would be no price adjustment.
The new mechanism will take into account China's crude import slate, although the NDRC did not specify which oil grades it would use.
"It is difficult to predict the [degree of] change in gasoline and gasoil prices since the NDRC has not specified the basket of crude grades," said an oil products trader in Guangdong province.
The Middle East, Angola and Russia are China's largest suppliers of crude oil so some traders said they have started including Russian ESPO and Oman grades in their calculations.
"Usually Chinese refineries refer to US WTI, so I would include this along with the benchmarks of Brent and Dubai," another products marketer in Fujian province said.
According to Platts calculations, the rolling 10 day average of Dated Brent, Russian ESPO and Middle Eastern Dubai and Oman grades had risen by 0.04% or 4.5 cents/b as of Tuesday compared with March 27.
The inclusion of WTI in the basket would bring the overall change to plus 0.3% over the same period, according to Platts calculations.
