China cuts fuel prices to counter slowing economy

China announced a reduction in retail fuel prices on Thursday in response to a further decline in global crude oil prices, Bloomberg reported. It is the first price cut since January 2007. As of December 19, the price of gasoline will be US$816 a metric ton, diesel will be US$727 a metric ton and jet fuel US$739 a metric ton, the National Development and Reform Commission (NDRC) announced. This represents reductions of 14%, 18% and 32% respectively. With crude oil prices now down 73% from their July peak, Beijing appears to be passing along the savings to its beleaguered manufacturers and airlines. Increases in fuel consumption taxes were also approved, although the NDRC only gave details for gasoline and diesel. The tax hikes, which take effect on January 1, are intended to replace road maintenance fees.