China's top pricing regulator is to introduce a more flexible method for pricing domestic fuel, with adjustments allowed if the international oil price fluctuates between $40 and $140 per barrel.

The pricing of liquefied petroleum gas will be solely market-based, according to a statement released by the National Development and Reform Commission on Wednesday. Under the new pricing system, the commission has lowered domestic gasoline and diesel prices by 140 yuan ($21) and 135 yuan a barrel, respectively, starting from Thursday. These cuts are equivalent to a 0.1 yuan reduction for standard gasoline and 0.11 yuan for standard diesel.

Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, said, "Market-based pricing of liquefied petroleum gas is a good staring point.