UPDATE 1-China says fuel prices based on $60/barrel crude

(Adds details)

BEIJING, July 10 (Reuters) - China's latest domestic fuel prices are based on crude oil prices at $60 per barrel and the market-linked pricing policy is aimed at curbing wasteful use of fuel, state media reported on Friday.

Including taxes, refiners were paying around $80 per barrel for their crude, Xinhua news agency quoted Xu Kunlin, the vice director general of the price department of the National Development and Reform Commission, as saying.

The remarks, giving a rare insight into the pricing mechanism in place since the start of this year, were made about a week after China unexpectedly raised its retail ceiling prices for gasoline and diesel by 9-10 percent on June 30, the third rise in four months and the biggest hike since June 2008. [ID:nPEK4425]

Xu said the last fuel price increase followed a 17.2 percent jump in the moving average crude price over a 22-working-day period since the previous price rise on June 1.

China has said it readjusts pump fuel prices if the moving average rates of a basket of international crudes moves beyond 4 percent over 22 working days.

Xu said the moving average had not changed much during July, despite a more than 10 percent fall in crude prices in the first 7 days of the month.

U.S. light crude for August delivery CLc1 was trading $1.13 a barrel lower at $59.28 a barrel at 1154 GMT on Friday.

The official denied talk that refiners were making big margins and said Chinese people were paying roughly the same as Americans at the pump, not counting taxes. Including taxes, the official quoted numbers that indicated Chinese consumers are paying some 20 percent more.

But industry officials have said China's three successive price increases since late March helped boost refining margins of state refiner Sinopec Corp (0386.HK)(SNP.N) and PetroChina (0857.HK), which have been increasing throughputs of crude oil amid rising sales. [ID:nPEK106126] (Reporting by Eadie Chen and Tom Miles, editing by Anthony Barker)