Chinese regulator lowers fuel prices

China’s economic planner said Wednesday that the price of gasoline would be lowered by RMB330 (US$52) per metric ton and diesel by RMB310 (US$49) – a cut of around 3.5%, Bloomberg reported. The decision to cut fuel prices, made by the National Development and Reform Commission, could hurt the bottom lines of state-owned oil companies China Petroleum (known as Sinopec; SNP.NYSE, 600028.SH, 0386.HKG) and PetroChina (PTR.NYSE, 601857.SH, 0857.HKG). Both firms reported significantly higher losses in their refining divisions in the first quarter than a year earlier. “This will take their break-even crude cost to around $111 a barrel from $115,” said Brynjar Eirik Bustnes, regional head of oil and gas equity research at JPMorgan Chase. “Operating profit will still be slightly negative.” China’s regulators raise or lower the price of fuel if the international spot price of crude oil fluctuates within a 4% range over a 22-day period.