The stronger the import, the stronger the "upside down". According to the National Development and Reform Commission of China, with the continuous sharp rise of oil prices in the international market, especially since mid-February this year, the price contradiction between domestic refined oil and crude oil has intensified, and enterprises have suffered serious processing and import losses. Most local refineries are in a state of shutdown or semi-shutdown, and the contradiction between supply and demand is prominent.
At the beginning of April this year, Su Zaigang, president of Sinopec Group, said at the performance conference in Hong Kong that the loss per ton of gasoline produced by China Petrochemical in 20081-March was 2 162 yuan, while the loss per ton of diesel oil exceeded 3,000 yuan.
China is under increasing international pressure to cut its oil subsidies. Western countries accuse China of implementing price control measures to artificially stimulate oil demand.
However, scholars in China don't think that China's increasing demand for oil has led to the excessive rise of oil prices. The main reason is that the four major investment banks in the United States operate in the oil futures market, which leads to excessive growth. Many members of the Organization of Petroleum Exporting Countries also think so.
On June 22nd, at the international oil conference held in Saudi Arabia, many members of the Organization of Petroleum Exporting Countries blamed the rise in oil prices on geopolitical factors and the speculation of several major investment banks, saying that actions should be taken to curb "speculators". Khalil, the rotating chairman of the Organization of Petroleum Exporting Countries and Algerian oil minister, believes that the current global oil price has nothing to do with the fundamentals of supply and demand.
However, the developed countries represented by the United States believe that the increase in demand in developing countries has led to the rise in oil prices. Such different views make it difficult for the General Assembly to reach a consensus.
The International Energy Agency's World Energy Outlook 2007 reports that high oil prices will bring a heavy burden to developing countries that are still seeking to protect consumers through government subsidies. China has to raise oil prices to curb the upside down, and at the same time face the pressure of inflation, which is a dilemma.
Will oil prices soar again?
Although the adjustment of refined oil prices has partially alleviated the upside-down contradiction between domestic oil prices and international oil prices, the upward adjustment of refined oil prices in China will not have a great impact on international oil prices, because a key factor in the rise of international oil prices is that financial capital makes waves in the international commodity market.
After the subprime mortgage crisis in the United States, a large amount of capital was driven out, and a considerable part of capital flowed from the financial market to the commodity market, pushing up the price of the commodity market, including oil futures. At present, the investment structure of the international crude oil market has changed. In the past, oil companies were large and financial institutions were small. Now a hedge fund can reach hundreds of billions, which can control the stock circulation of oil companies.
Some analysts believe that when the China government suddenly announced an increase in the price of refined oil, China was taking the risk of inflation. Wang Qing, chief economist of Morgan Stanley Greater China, believes that the increase of retail price of refined oil in China 10% will lead to an increase of 0.3% to 0.4% in the broad sense of CPI inflation.
Since July last year, driven by the prices of agricultural products, the inflation level in China has been rising. In April this year, the CPI reached 8.5%. If the oil price is released, it will promote a new round of inflation climax, which will have a great impact on China's agricultural production, especially increasing the costs of fertilizers, pesticides, harvesting and transportation. If the food price does not rise with it, it may lead to a crop failure crisis and lay a "bomb" for next year's price. However, fuel subsidies also have to pay a huge financial price. Indonesia, Malaysia, the Philippines and other countries have liberalized fuel prices, and India has recently cut fuel subsidies, raising gasoline and diesel prices by about 10%. Undoubtedly, this will face a bigger inflation crisis.
The report of CICC Research Department also believes that after this price adjustment, there is still 60% room for upward adjustment of China's refined oil prices in line with the international level. However, compared with a one-time sharp increase, the government's current step-by-step price adjustment method is the best way. This can not only gradually straighten out energy prices, but also play a role in avoiding overshoot when international oil prices may fall. This process of gradual reform should continue in the future.
A spokesman for the National Development and Reform Commission also said in an interview with the media recently that PetroChina may raise prices further. Oil seems unlikely to fall in the near future.