China's retail fuel prices will be cut slightly starting from Wednesday, reflecting a glut of supply in the market.
The National Development and Reform Commission, the nation's top economic planner, said that retail prices of gasoline would fall by 95 yuan ($15.35) per metric ton, or 0.07 yuan a liter, while diesel prices will go down by 90 yuan per ton, or 0.08 yuan a liter.
After the reduction, the benchmark price of 90-octane grade gasoline will be 6.09 yuan a liter.
Domestic retail fuel prices have seen five hikes and five cuts so far this year. The gasoline price has increased by 365 yuan per ton while the price of diesel is up by 295 yuan per ton.
Influenced by Greece's rejection of debt bailout terms, the US crude price benchmark West Texas Intermediate fell 7.73 percent, or $4.40, on Monday to $52.53 a barrel, the biggest drop since Feb 4 and the lowest price per barrel since April 13.
Li Yan, a crude oil analyst at consultancy Shandong Longzhong Information Technology Co, said several factors may further drag down the crude price in addition to Greek crisis.
"Crude output from the United States and the Organization of Petroleum Exporting Countries continue to increase, which will pump into an oversupplied global market," he said.
He expects retail prices to falls again at the next adjustment date, scheduled for July 21.
According to the consultancy, average running capacity at China's refineries was 81.72 percent during the first half, a 1.39 point decline compared with the same period last year, reflecting a weak downstream demand.
"The number of China's autos has been increasing, resulting in a stable demand for gasoline, but diesel demand is slowing because of a weak economy, especially in the logistics sector," Li said.
