BEIJING — China will cut retail prices of oil products to the "floor rates" in light of a slump in international oil prices, the country's top economic planner said on March 17.

Starting March 18, the prices of gasoline and diesel will be lowered to a level corresponding to $40 a barrel, the floor set by the Chinese government, Peng Shaozong, an official with the National Development and Reform Commission, said at a press conference.

Under the current pricing mechanism, China will adjust domestic prices of refined oil products when international crude prices translate into a change of more than 50 yuan per metric ton for gasoline and diesel for a period of 10 working days, but will not do so if the international prices go below the floor of $40 or above the ceiling of $130 a barrel.

The floor and ceiling aim to buffer the negative effects of violent fluctuations in international oil prices, as excessively high prices will add to consumer burden. In contrast, low prices could hurt domestic oil production, leading to higher energy dependency on imports, according to Peng.

Oil prices declined significantly in the international market in the past few days, pressured by a looming supply glut and fears over weak demand.