China has reduced the retail prices of gasoline and diesel effective midnight Friday by Yuan 160/mt ($26.09) and Yuan 155/mt, respectively, the National Development and Reform Commission said Thursday.

At the pump, the resulting adjustment will average Yuan 0.13/liter for diesel and Yuan 0.12/liter for gasoline, the NDRC said.

China last reduced both gasoline and diesel retail prices by Yuan 75/mt on November 1.

The government sets benchmark retail prices for gasoline and diesel.

Under the existing oil product pricing mechanism introduced in March, regulated oil product prices are automatically adjusted every 10 working days in line with international crude price fluctuations, unless the resulting price change is smaller than Yuan 50/mt, or roughly equivalent to $1/barrel.

In this case, the adjustment will be rolled over and included in the next price change.

The current system is intended to help refiners reduce losses incurred due to the government's cap on oil product prices, which were previously exacerbated because the government reviewed prices every 20 days and at times refused to adjust prices due to inflation concerns.