Petrol Prices Cut in China

China has surprisingly cut the retail price of petrol and aviation fuel by 3.8% for the first time in 19 months.

Oil refiners China National Petroleum Corporation and China Petroleum and Chemical Corporation (Sinopec) have been told to lower prices from Sunday.

Refiners have been processing at a loss for over a year and had been hoping to return to profit as crude prices fall.

There are close to three million private cars in China and parts of the country have been hit by petrol shortages.

The cut, only the second in five years, will also see the ex-refinery price of jet fuel cut by 90 yuan a tonne.

US crude oil prices have fallen sharply since China last adjusted domestic fuel prices - upwards - on 24 May, 2006.

Crude oil for February delivery closed at $52.99 a barrel on Friday, down 13% since the start of the year and down a third from the record peak of $78.40 hit in July 2006.