China's top economic regulator announced on Tuesday that it will raise the retail prices of gasoline and diesel starting Wednesday, but the hike will be smaller than dictated by the standard pricing mechanism to mitigate the impact of volatile international crude prices.

Starting at midnight on April 7, the retail prices of gasoline and diesel will increase by 420 yuan ($58.5) and 400 yuan per metric ton, respectively, according to the National Development and Reform Commission (NDRC).

Under the country's existing pricing mechanism — which tracks global crude movements every 10 working days — the sharp rise in international oil prices since the last adjustment would have triggered a much steeper hike of 800 yuan per ton for gasoline and 770 yuan for diesel.

The NDRC stated that the moderated adjustment aims to balance market supply security with the financial endurance of downstream users.

The move is designed to avoid the excessive impact of abnormal price fluctuations on downstream sectors while appropriately reflecting the rising costs of imported crude oil to ensure a stable domestic supply, it said.

To ensure market order, the NDRC has directed major State-owned oil companies — including China National Petroleum Corp, China Petroleum and Chemical Corp, and China National Offshore Oil Corp — to optimize production and logistics to guarantee adequate supply.

Local authorities have also been urged to intensify market supervision and strictly penalize any violations of the national pricing policy.