Domestic refined oil once again entered the price adjustment period (Figure)

More than a month later, China once again faced the pressure of refined oil prices. Market research institutions generally expect that the price of refined oil will rise once in mid-to-late March, and the price adjustment is a sensitive period in the near future.

Domestic refined oil enters price adjustment period

The current domestic refined oil price has reached the highest level in history, while the international oil price is still making rapid progress, which makes it increasingly difficult for China's oil product price adjustment. Experts called for new oil pricing mechanisms to be launched.

According to the latest domestic refined oil price adjustment is only more than a month, the theoretical window of the domestic oil price adjustment has once again opened.

Market research institutions generally estimate that, taking into account the time interval conditions, to March 8 domestic refined oil price adjustment window has officially opened. With the high international oil prices, the prices of oil prices in the three places have far exceeded the 4% price adjustment reference line and even reached more than 10%. As of March 15th, the rate of change of crude oil prices in the three places monitored by Anxon Siswang Energy reached 10.88%; the data monitored by the East Oil and Gas Network also reached 10.507%.

At present, the price adjustment of refined oil is expected to be strong in the current market, and it has become a common market operation behavior for brokers to reluctantly sell goods. The reason why oil products are hoarded is because traders are betting on price increases. They buy oil products at low prices and expect to sell them at a high price after the price of domestic refined oil products is raised in the later period.

Shen Yu, a Sino-U.S. oil product analyst, told reporters that traders in the market are expecting stronger price adjustments. Starting from February 20th, the market has begun to replenish stocks. By early March, traders’ stocks have been basically completed.

At the 2012 China Petroleum Market Situation Seminar and the North-South Supply and Demand Matchmaking Symposium, refiners and traders from all over the country were highly concerned about when the price adjustment was honored. A gas station chain operating company in North China told the reporter that the recent adjustment of refined oil products in China is highly probable. Most participants in the market have already purchased oil in advance. At present, the company's 50,000 cubic meters of oil depots has been in a high inventory state.

Affected by market sentiment, although the price adjustment has not yet started, the wholesale price of diesel fuel has risen by over RMB 70/t in one month.

On February 8 this year, China ushered in the first increase in refined oil prices during the year, and the maximum retail price of gasoline and diesel was raised by RMB 300/ton. After this price increase, China's gasoline and diesel prices returned to the highest historical prices. If the domestic refined oil prices have recently been raised again, this means that domestic gasoline and diesel prices will once again set a new record.

Domestic prices of refined oil are the scourge of international oil prices. As international oil prices have risen steadily, it has become increasingly difficult for domestic product oil price adjustments.

Lin Boqiang, director of the Energy Economics Research Center at Xiamen University, believes that when domestic oil price adjustments are made, it is necessary to do a good job of matching subsidies for special groups. If the international oil price reaches US$130/barrel or more, domestic oil prices will no longer be raised in accordance with China's current refined oil pricing mechanism. In this special period, the state can adopt a tax reduction method and appropriately reduce the consumption tax to reduce the burden on the refinery and encourage its normal production. This is a relatively common practice in foreign countries.

Dong Xiucheng, deputy dean of the School of Business Administration of China University of Petroleum, said that since the beginning of this year, international oil prices have fluctuated at a high level, and reform of the refined oil pricing mechanism is facing a dilemma: On the one hand, new pricing mechanisms for refined oil that can better reflect changes in the international market will be introduced once domestically. The price adjustment may be more frequent, so the government has been delaying the consideration of stabilizing prices; on the other hand, if the new mechanism is not introduced, the price adjustment of refined oil will lag behind, and it will not be adjusted every time. The loss of oil companies will intensify and the production enthusiasm will reduce the supply shortage. There is still the possibility of an oil shortage. Taken together, Dong Xiucheng believes that the new pricing mechanism still needs to be determined.

It is worth noting that according to the reform signals disclosed by the relevant departments, the price adjustment cycle of the new pricing mechanism will be shortened and the pace of price adjustment will be accelerated. This will increase the difficulty of speculation in the oil market and help reduce the market's speculation component. Reduce the possibility of "man-made oil shortage".

In addition, relevant experts from the National Development and Reform Commission revealed that in the new pricing mechanism, the price of WTI crude oil, which is relatively cheap, will be newly included in the reference oil pricing for refined oil products. This also means that the prices of crude oil in the three places referenced by China's refined oil price adjustment may become the price of crude oil in four places.

For more than a year, WTI oil prices have maintained wide spreads with Brent. At present, the former is cheaper than the latter by nearly $20/barrel. If the WTI price is included in the reference, the average price of crude oil in four places may increase slowly.