The recent price rise of refined oil products cannot fully offset domestic refiners' losses caused by surging crude prices...
The recent price rise of refined oil products cannot fully offset domestic refiners' losses caused by surging crude prices, say industry insiders.
The price increase can relieve domestic oil refiners' difficulties to some degree but it won't put them back in the black, said Zhou Dadi, deputy director of China Energy Research Society.
China's top economic planning body, the National Development and Reform Commission (NDRC), last month announced the price of gasoline and diesel would go up by 1,000 yuan per ton from June 20, and the price of aviation kerosene would increase by 1,500 yuan per ton.
The move can narrow the gap caused by the high crude prices on the international market and the relatively low prices of domestic refined oil products. The price gap has dented China's economic development, he said.
Before this round of price rise, the last time China adjusted gasoline and diesel prices was in November 2007, when the price of gasoline, diesel and aviation kerosene was raised by 500 yuan, or 9 percent, a ton. At that time the global crude price was around $90 per barrel. However, crude prices surpassed $130 per barrel last month and are now hovering around $140.
Zhou's view was echoed by Liu Gu, an energy analyst with Guotai Jun'an Securities in Shenzhen. "The country's two leading oil companies, PetroChina and Sinopec, will continue to see losses in their refining business even after the price hike."
