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[YesAuto News] A few days ago, the National Development and Reform Commission announced that from 24:00 on March 17, a new round of refined oil price adjustment window will open: gasoline will be reduced by 1,015 yuan per ton, diesel will be reduced by 975 yuan per ton, of which 92 gasoline will be reduced by 0.80 per liter. Yuan, the 95th gasoline will be reduced by 0.84 yuan per liter, and the 0 diesel will be reduced by 0.83 yuan per liter. According to the estimation of the 50L capacity of a general family car's fuel tank, a full tank of 92 gasoline will save 40 yuan. This price adjustment is the third reduction in the domestic product oil price adjustment window in 2020. Taking Beijing as an example, the adjusted gasoline price of 92# gasoline is 5.5 yuan/liter; 95# gasoline is 5.86 yuan/liter.

International oil prices fell sharply amidst turmoil

During the price adjustment cycle, OPEC led by Saudi Arabia and Russia failed to reach an agreement on production cuts. After the negotiations broke down, Saudi Arabia launched a price war. On the one hand, it lowered the official price of crude oil with the UAE and other oil-producing countries, and on the other hand, it planned to expand crude oil production. Coupled with the explosive growth of the new crown pneumonia epidemic overseas, the WHO declared the new crown pneumonia a “pandemic”, and market panic has increased. Affected by this, crude oil prices in the international market have fallen sharply amidst severe fluctuations. Take March 9th as an example. Crude oil prices fell sharply by 24% that day, the biggest one-day drop since the Gulf War in 1991. On average, the prices of New York WTI and London Brent crude oil futures in this price adjustment cycle were US$37.15 and US$40.27 per barrel, respectively, down 25.86% and 27.30% from the previous period.

The Price Monitoring Center of the National Development and Reform Commission predicts that, taking various factors into consideration, the low level of international oil prices at or below US$40 will continue for some time. From the perspective of demand, while the situation of my country’s epidemic prevention and control is improving, overseas epidemics are spreading. The situation of prevention and control is getting more and more severe. Global economic growth is obviously affected. The transportation industry bears the brunt, refined oil and jet kerosene. Consumer demand has fallen sharply, and crude oil demand is expected to fall from an increase in the first quarter. It is expected that the impact of the epidemic on global crude oil demand will continue for at least the entire first half of the year. From the perspective of supply, after Saudi Arabia started a price war, Saudi Aramco plans to increase its crude oil supply in April to 12.3 million barrels per day, an increase of nearly 25% compared to January's supply. At the same time, Russia also plans to increase crude oil production starting in April. If the two parties do not return to the negotiating table and expand production according to this capacity, global crude oil will face a severe oversupply in the second quarter, and crude oil prices will continue to remain low. In addition, the spread of the epidemic has also aggravated panic in the market. The stock and bond markets have fallen sharply, and market confidence has become weaker. The focus of market attention in the later period will be on the overseas development and prevention and control effects of the new crown pneumonia epidemic, as well as the effect of the US policy of intervening in oil prices.

Domestic refined oil prices fell sharply and touched floor prices

The National Development and Reform Commission stated today that in accordance with the “Petroleum Price Management Measures” promulgated in 2016, the highest retail prices of domestic gasoline and diesel will be adjusted every 10 working days according to changes in international crude oil prices. From the perspective of nearly 10 working days, international oil prices have fallen sharply, and the average level has fallen below the lower limit of US$40 per barrel. The price of domestic refined oil products will be adjusted to a corresponding level of US$40 from 24:00 today, which is lower than US$40. Part is no longer reduced.

The refined oil price mechanism sets the upper and lower limits of regulation. The upper limit is 130 U.S. dollars per barrel and the lower limit is 40 U.S. dollars. That is, when the international market crude oil price linked to the domestic refined oil price is higher than 130 U.S. dollars per barrel, the highest retail price of gasoline and diesel will not be mentioned or less; when it is lower than 40 U.S. dollars, The maximum retail price will no longer be lowered. From a historical point of view, from January to April 2016, due to the sharp drop in international oil prices, which touched the lower limit of domestic refined oil prices, domestic oil prices were not adjusted for the part below US$40 according to the mechanism.

Setting the upper and lower limits is mainly based on the consideration that my country is not only a major oil importer and consumer, but also a major oil producer, and oil prices that are too high or too low will have adverse effects. If it is too high, it will increase the burden on the oil industry and consumers and affect the smooth operation of the national economy; if it is too low, it will affect the normal development of the domestic crude oil extraction industry, weaken self-sufficiency, and lead to a further increase in foreign dependence, which is not conducive to ensuring domestic energy security.

It should be noted that when the oil price is lower than the lower limit of regulation, the unadjusted amount of domestic refined oil prices is not directly left to the enterprise as income, but is all included in the risk reserve, and in accordance with the “Administrative Measures for the Collection of Oil Price Regulation Risk Reserves”, The full amount is turned over to the central treasury and incorporated into the general public budget management to coordinate the sources of funds for energy conservation and emission reduction, improve oil quality, ensure the safety of oil supply, and respond to large fluctuations in international oil prices and implement safeguard measures.

List of oil price changes during the year: three falls and two stranded

In 2020, domestic refined oil price adjustments have shown a pattern of “three falls and two strands”. As of March 17, there were 5 price adjustment window periods this year, of which domestic refined oil prices were lowered on February 4, February 18, and March 17. As of this price adjustment, the price of gasoline has been reduced by 1,850 yuan per ton, and the price of diesel has been decreased by 1,780 yuan per ton. In the first 10 working days corresponding to the two window periods on January 14 and March 3, international oil prices have risen and fallen, and the average level has not changed much. The domestic refined oil price adjustment amount is less than 50 yuan per ton, and the price has not been adjusted. The adjustment part has been included in the price adjustment amount on February 4 and March 17 respectively. (Article source: @央视经济; Compilation/Car Home Li Na)