New pricing mechanism for refined oil will consider domestic factors

The National Development and Reform Commission is consulting all parties in the industry on the reform of the new refined oil pricing mechanism. On September 20, the "Daily Economic News" learned from insiders of PetroChina and Sinopec that the National Development and Reform Commission has revised the draft for comments issued in July this month, and has denied the decentralization of oil pricing rights for refined oil proposed in the original manuscript. The company's plan, however, is likely to add "domestic factors" to the new pricing mechanism.

According to insiders from PetroChina and Sinopec, as early as July of this year, the NDRC introduced a solicitation draft for the reform of the refined oil pricing mechanism. In September, it revised the relevant contents of the draft.

In the previous draft of the Consultation on the operation of refined oil prices, the government specified and announced the price mechanism, but the specific operating right of the price adjustment was handed over to the three major oil companies, and at the same time, price controls on other business entities were released. In the latest comments, the plan to decentralize oil companies under pricing authority has been denied.

In response to rumors that the "pricing mechanism will be reduced to 10 days," the relevant person in the Development and Reform Commission's Price Division said in an interview with a reporter from the "Daily Economic News" that "had not heard of it."

The reporter learned that the draft of the request for comments still clarified the principle that the domestic pricing mechanism is headed towards the marketization track and is closer to the domestic market. It mentioned that "according to the changes in the oil price in the international market and the supply and demand situation in the domestic refined oil market, the price adjustment plan will be determined by itself." This clearly shows that the NDRC's pricing will have to refer to the domestic supply and demand situation, and look at the domestic wholesale and retail price changes and pricing ideas.

Siemens Energy analyst Liao Kaiyi believes that this will change the current situation where pricing agencies only look at international crude oil prices. In the future, the price adjustment will depend on market supply and demand. Even if the international oil prices are high, if the domestic market exceeds supply, it will not necessarily increase prices. The price of oil will be lowered, and the price will rise if supply exceeds demand. In addition, changes in the wholesale price and retail price difference are also under consideration.

Disclaimer: This article only represents the personal opinion of the author and has nothing to do with Phoenix. Its originality and the text and content of the statement in this article are not confirmed by this site. It does not guarantee or promise to this site and all or part of it, the authenticity, completeness and timeliness of the text. The reader is only for reference and please Verify the relevant content yourself.