Together with the International Energy Agency's (IEA) strategic oil release, China's move to cut fuel import tariffs will help reduce oil prices and ease imported inflationary pressures, the Shanghai Securities News quoted experts as saying Wednesday. The Ministry of Finance announced on June 24 to cut import tariffs on gasoline and fuel oil and levy zero import tariffs on diesel and jet fuel starting July. "Under the circumstances, domestic oil prices are very likely to drop, which will play a significant role in reducing imported inflationary pressures," said Pang Changwei, a professor with China Petroleum University, in the report. Following the plunge in global oil prices triggered by the IEA's decision to inject 60 million barrels of oil into crude markets, China's product oil prices also dropped moderately, the report said. In the southwest municipality of Chongqing, the wholesale price of product oil fell by 300 yuan per tonne month-on-month in June. Also, the country's largest oil and gas producer PetroChina had recently begun to lower retail prices at some of its gas stations in Shanghai, said the report. The report also quoted Wang Liangliang, an analyst with CES Futures, as saying that the drop in oil prices could curb inflation. "The cost of crude oil decides the prices of many commodities as crude oil is the most important raw material," Wang said. According to Pang, easing oil prices will cut costs in the transportation, automobile and petrochemical sectors and motivate privately-owned refineries to restore production, which will help ensure product oil supplies during the summer peak season for energy demand, the report said. China's consumer price index, the main gauge of inflation, accelerated to a 34-month-high of 5.5 percent in May, up from 5.3 percent in April and far above the government's annual target of 4 percent.

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