BEIJING - CHINA cut retail prices of gasoline and diesel by up to 17 per cent on Friday and also lowered wholesale prices, the government and state press said, as world oil prices continue to fall.

The retail price of gasoline was reduced by an average 0.91 yuan (S$0.19) per litre, the National Development and Reform Commission, the country's top economic planning agency, said in a statement.

Gasoline in Beijing was cut by 14.6 per cent to 5.44 yuan per litre, according to Friday's Beijing News.

The diesel retail price in the capital was slashed 1.08 yuan per litre, or nearly 17 per cent, to 5.4 yuan, the paper said.

'The cut is the biggest in recent years, and it is in line with the current international oil price level,' said Mr Wang Chaocai, a finance ministry official, according to the report.

Analysts said the price reduction would give a boost to China's slowing economy and also help ease some social tensions highlighted by taxi drivers' strikes that have occurred in several cities recently.

The government reduced wholesale prices of gasoline and diesel by around 13 and 17 per cent to 5,580 yuan per tonne and 4,970 yuan per tonne respectively.

The cuts were made in order to bring the domestic prices more in line with global market costs, the commission said in its statement.

World crude prices are 70 per cent off record highs of US$147 a barrel reached in July, as demand has dried up in recession-hit industrialised nations.

China, which kept domestic oil prices artificially low even as the cost of petrol rocketed, last adjusted fuel prices in June. -- AFP