China has introduced a new market driven oil pricing system to help domestic refiners quickly adjust their pricing as per the changes reflected in the international oil market.

Before the introduction of the new system on Tuesday, the country used to follow a system that was launched in 2009, where China would adjust oil prices when Dubai Brent and Cinta crude oil prices change by over 4% over 22 working days.

China is now abandoning the old oil pricing system and will reduce the adjustment period to 10 days. It will also remove the 4% limit to provide more flexibility in the domestic market to quickly respond to the changes reflected on the global oil market.

Gasoline and diesel prices for the first time in the year have been cut and the maximum retail prices for gasoline and diesel will be cut by CNY310 ($49.4) and CNY300 ($47.8) per ton, respectively, reported China Daily.

The country will also adjust the crude prices to which oil prices are linked.

The retail gasoline price, post new adjustment will be less than CNY7 ($1.1) per liter in most of the Chinese cities, including Shanghai, Beijing, and Guangzhou.

Under the new pricing system, operators can determine their own retail prices, depending upon the demand and supply and also by referring to the regulated prices.