China, the second biggest consumer of fuel globally, has cut retail prices by about 5% starting Wednesday, as oil demand falls.
This is the third cut in two months, and some analysts say could be an attempt to increase fuel consumption.
Demand for oil fell for the first time in three years in April.
Domestic and global factors have weighed on the Chinese economy in recent months, which has shown signs of slowing.
Gasoline retail prices will be reduced by 420 yuan ($65.90; ï¿¡42.50) a tonne and diesel prices by 400 yuan, the National Development and Reform Commission said.
It added that the move was made in response to lower international crude prices and changes in the "conditions of domestic and international economies, as well as the domestic refined oil market".
China introduced an oil pricing system in 2009 to protect consumers from fluctuations in the price of crude oil on international markets.
The system kicks in when prices change by more than 4% within 22 working days, according to Xinhua news agency.
China, the second biggest consumer of fuel globally, has cut retail prices by about 5% starting Wednesday, as oil demand falls.
