China's domestic refined oil product prices are adjusted based on a mechanism linked to international crude oil prices. According to the "Petroleum Price Management Measures" issued by the National Development and Reform Commission in 2016, prices for gasoline and diesel are reviewed every ten working days in response to changes in global crude oil markets. As a major petroleum importer, with over 70% of its crude oil sourced internationally, China's pricing framework operates on three key principles.
The mechanism utilizes a "basket" of international crude oil prices rather than a single benchmark, ensuring adjustments reflect average price movements across multiple crudes. Price changes are determined by comparing the average price of this basket over the preceding ten working days against the average from the previous adjustment period. Additionally, an "interval control" provision allows for government intervention under specific circumstances.
In recent years, domestic fuel prices have fluctuated in accordance with this mechanism. For instance, 2023 saw 10 increases, 12 decreases, and 3 periods of no adjustment; 2024 recorded 9 increases, 9 decreases, and 7 unchanged periods; while 2025 experienced 7 increases, 12 decreases, and 6 periods of stability. Recent volatility in international markets, particularly record-high crude prices from the Middle East, has elevated China's import costs and contributed to an upward trend in domestic fuel prices.
Temporary price controls may be implemented to mitigate the impact of abnormal international price surges. Under the current system, intervention occurs when the ten-working-day average of the international crude basket exceeds $130 per barrel or falls below $40. Recent controls were enacted under a special clause allowing for paused, delayed, or reduced adjustments during significant domestic inflation, major emergencies, or abnormal global market fluctuations.
Such measures aim to balance consumer and producer interests, cushioning the economy and end-users from sharp price hikes while ensuring stable operation and social welfare. For example, an adjustment on March 23 originally called for increases of 2,205 yuan and 2,120 yuan per ton for gasoline and diesel, respectively, but was limited to 1,160 yuan and 1,115 yuan after intervention. This translated to a reduction of approximately 0.85 yuan per liter for both 92-octane gasoline and 0-grade diesel. A similar intervention on April 7 reduced increases by about 0.31 yuan per liter for gasoline and 0.32 yuan for diesel.
Should the average international crude price surge beyond $130 per barrel—roughly corresponding to a retail price slightly above 10 yuan per liter for 92-octane gasoline—the price control ceiling would be triggered. In such cases, maximum retail prices may not be raised fully, and fiscal or tax support policies could be introduced to maintain supply stability. During the 2022 Russia-Ukraine conflict, for instance, domestic prices were frozen for up to two months when international rates exceeded $130, with subsidies provided to refiners.
Authorities have directed major oil producers and distributors, including PetroChina, Sinopec, and CNOOC, to ensure stable supply and strict adherence to pricing policies. Local regulators are strengthening market oversight to curb violations, and consumers can report irregularities through the 12315 platform.
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