August 22nd, 2011 | China Daily Domestic oil price expected to drop
Analysts expect domestic prices of oil products to lower by late August or early September following the continuous downwards trend of international crude oil futures.
Compared to the average contract price of Brent crude futures in July, figures have dropped by 7 percent as of Aug 18. Cinta crude futures dropped 3 percent and Dubai futures declined 4 percent, Xinhua reported Friday.
Domestic prices are based on the 22-day moving average price of Brent, Dubai and Cinta crude oil futures. The domestic prices are adjusted accordingly when changes in the moving average price exceeds 4 percent. The National Development and Reform Commission (NDRC) has previously announced that it would lower prices as soon as this criteria was met.
Several analysts predict that, based on recent trends, the NDRC will lower the domestic price as early as the end of August.
Cheng Ruifeng, an analyst at Shanghai Toprise Oilgas Website, disagrees with these predictions. Cheng told Dongfang Daily that the price adjustment might not be made until early September. He predicts that the NDRC will wait as the Brent crude futures price might maintain the price of $109 a barrel.
Xinhua News Agency reported earlier that Sinopec (Hong Kong) Petrol Filling Station Co Ltd announced on Aug 10 a fall in its prices of petrol and diesel, the third price drop this year.
A gas station in Shanghai lowered its price of 93 RON petrol to 7.25 yuan a liter, 0.54 yuan lower than the 7.79 yuan guide maximum retail price.
The domestic oil products price reached an historical peak in April 7, raising the price of a ton of petrol to 500 yuan ($78) and increasing the price of diesel by 400 yuan.
By Hao Yan