China to lower retail prices of gasoline, diesel on tax cuts

China will lower the retail prices of gasoline and diesel from Monday, the country's top economic planner said Friday.

Due to value-added tax (VAT) rate adjustment starting from April 1, the retail prices of gasoline and diesel will be slashed by 225 yuan (about 33.4 U.S. dollars) per tonne and 200 yuan per tonne respectively, the National Development and Reform Commission said in a statement.

The VAT rate for refined oil products will be dropped from 16 percent to 13 percent, according to the statement.

The statement came on the heels of an announcement made by the economic planner Thursday, which said the retail prices of gasoline and diesel would both be raised by 80 yuan per tonne starting from Friday.

Under the current pricing mechanism, prices of refined oil products are adjusted when international crude oil price changes translate into a change of no less 50 yuan per tonne for gasoline and diesel prices within a period of 10 working days.

International crude prices rose to a nearly 5-month high recently on tight supply.