China's retail fuel price cap tracks the ten-working-day moving average of international crude. With both benchmarks plunging overnight, the gap between the current-window average and the prior window widened fast. Brent has broken below $106/bbl, and on a moving-average basis this window's mean sits well under the last one.

The trigger is the average gap, not the single-day print. A 6.6% one-day drop looks dramatic, but if crude does not rebound materially over the next sessions, the moving mean stays below the prior window and, once the gap clears the adjustment threshold, pump prices move down. If the market bounces back, the gap closes quickly and the window can lapse.

This mechanism governs inland product prices, but bonded bunker fuel runs on a different ledger. Bunkering at Zhoushan and Dalian moves through a duty-free channel, priced off Singapore market quotes and freight, decoupled from the inland retail formula. So crude falls, bonded bunker eases on cost, but it does not activate the inland pricing mechanism.

For refiners, cheaper feedstock plus a downward retail expectation brings brief relief between two squeezing forces: buying crude is cheaper, selling product has not moved yet. The real margin repair depends on the crack — crude falling faster than products is what gives refiners an actual margin bounce.