Effective midnight on October 29, retail prices of gasoline and diesel (standard grade) in China underwent a new round of adjustment. China’s National Development and Reform Commission announced that day that, calculated under the current pricing mechanism, gasoline and diesel prices should have risen by 440 yuan (approximately $66) and 420 yuan (approximately $63) per ton during this pricing window. However, to ease the burden on downstream users and ensure the safe and stable supply of refined oil products, the Chinese government once again took regulatory measures, narrowing the actual increases to 345 yuan (approximately $52) and 335 yuan (approximately $50) per ton.
This is the second time the Chinese government has intervened in refined oil pricing since the previous adjustment on October 15. The NDRC said that during this pricing cycle, escalating geopolitical tensions in the Middle East drove a sharp rise in international crude oil prices, and the government’s intervention was intended to slow the transmission of external shocks to the Chinese market.
Note: All amounts are denominated in yuan. Source: pricing adjustment plan published by China’s National Development and Reform Commission.
Beyond the price adjustment, Chinese regulators simultaneously arranged work to safeguard supply and price order. PetroChina, Sinopec, CNOOC and other crude oil processing enterprises were required to organize refined oil production and distribution, ensure stable market supply, and strictly implement state pricing policy. Relevant departments across China will step up market supervision and inspections, and severely punish behavior that fails to comply with state pricing policy.
Consumers who discover price violations can report them through the 12315 platform.
From the perspective of mechanism design, this adjustment continues the approach of “adjusting less than required”: prices partially reflect rising international crude oil costs, while the compressed increases buffer the impact on downstream sectors such as transportation, logistics, and industrial and agricultural production. For refining and petrochemical enterprises, the actual adjustment being lower than the mechanism-calculated figure means cost pass-through is incomplete, and refining segment margins may come under pressure in the short term; for downstream oil-consuming industries, the regulatory intervention has to some extent weakened the cost increases brought about by higher oil prices.
Notably, the Middle East situation remains a key variable for the future trajectory of oil prices. If international crude oil prices remain elevated, pressure for domestic refined oil price adjustments in China will persist, and whether regulatory measures will continue to be used—and with what intensity—will become an important window for observing the direction of China’s energy pricing policy.
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