PUMP prices in Shanghai were cut by 1 percent from midnight last night, an adjustment to reflect changes in global crude oil markets, the government said.

The ceiling price at local gas stations for 93-octane gasoline was cut to 7.43 yuan (US$1.21) a liter from 7.50 yuan, while 97-octane gasoline fell to 7.90 yuan from 7.98 yuan. Zero-grade diesel now sells for a maximum 7.32 yuan, down from 7.39 yuan, the Shanghai Development and Reform Commission said.

Rates vary from province to province. Shanghai's rates are among the highest in China, in part because of higher fuel standards.

Across the country, the National Development and Reform Commission said it cut gasoline prices by 95 yuan per ton and diesel by 90 yuan per ton. The commission reviews them every 10 working days based on movements in global crude markets. But prices are not adjusted if the resulting price changes are less than 50 yuan per ton.

The NDRC didn't adjust prices on May 24 in the previous price review. It next reviews prices on June 24.

The pricing mechanism was launched in late March as part of efforts to link fuel prices more closely with the cost of crude oil. Before that, the price adjustment cycle was 22 working days, and there was also a minimum threshold for crude price changes before there was any change at the pumps.

Under the old mechanism, fuel rates were not adjusted in a timely manner over inflation concerns, causing losses in the refining industry when crude prices were rising rapidly.