After 3 Increases, China Finally Cuts Fuel Prices for the First Time This Year
China has officially lowered the retail price cap for domestic petrol and diesel starting from the evening of 21 April 2026. This marks the first fuel price cut throughout the year after global oil prices began to fall from their peak during the escalation of the Iran war.
The price reduction offers some relief to consumers, particularly private vehicle owners. According to the Straits Times, a car owner is estimated to save around US$3.23, or the equivalent of Rp54,910 (assuming an exchange rate of Rp17,000 per US dollar), when filling a 50-litre tank of 92-octane petrol.
Previously, Beijing had raised the maximum prices for petrol and diesel three times since March 2026. These increases followed the war that began with attacks by the United States and Israel on Iran on 28 February, causing a sharp surge in global oil prices.
The two most recent increases were limited to only about half of the normal rise that should have occurred under China’s pricing mechanism. This step was taken by the government to protect consumers from excessively large spikes in energy costs.
The National Development and Reform Commission of China (NDRC) stated that the maximum retail price for petrol will decrease by 555 yuan, or approximately Rp1.03 million, per tonne, while diesel will fall by 530 yuan, or about Rp986,000, per tonne.
Previously high fuel prices were said to have significantly pressured retail consumption. This situation caused fuel stocks to pile up at independent refineries and prompted widespread wholesale price cuts to clear inventories.
A Chinese energy consultant, Oilchem, noted that the high prices of petrol and diesel had led to a sharp weakening in demand, forcing many industry players to offer substantial discounts.
The NDRC conducts evaluations and price adjustments for fuel every 10 working days. The calculations are based on changes in global crude oil prices, taking into account average processing costs, taxes, distribution costs, and a reasonable profit margin.
China last raised the maximum prices for petrol and diesel on 7 April, by 420 yuan per tonne and 400 yuan per tonne, respectively.
Global oil prices began to decline after the United States and Iran reached a temporary ceasefire. However, the energy market outlook is once again overshadowed by uncertainty following Iran’s condemnation of the US over an alleged attack on the Iranian merchant ship Touska.