The refined oil pricing mechanism caused tight supply and demand

Analyst Liu Binghong, an analyst with mainland futures energy and stock index futures, also described some situations in the Shanghai oil retail market in an e-mail sent to this reporter. He said that Shanghai's refined oil market is similar to the Beijing market in recent days. The tight consumption situation in the gasoline and diesel market has intensified. The main business units have relatively tight resources, which in turn push up prices, while tightening the supply of external wholesales, and providing guarantees for subordinate oils. Station retail and terminal agreement users. In particular, high-standard gasoline, basically no longer only wholesale retail sales, diesel resources are few, outside the amount of small, high prices. This fully demonstrates that the country’s oil supply has begun to become tight.
Liu Binghong analyzed that the situation in Beijing is undoubtedly a microcosm of the tight oil product retail market in the country. He believes that there is indeed an effective supply shortage in the domestic refined oil market. At the same time, due to the upcoming 2008 Beijing Olympic Games and the improvement of living standards, the automobile The continuous increase in sales volume will drive the use of refined oil in relevant fields in Beijing and even in the country, which is higher than in previous years. The supply and demand relationship is even more tense. Take diesel as an example, the trend in recent years has been a gradual shift from oversupply to supply shortage. Due to the imbalance between supply and demand, the price of diesel oil has also seen a phenomenon of wholesale and retail reversed.
Liu Binghong believes that the so-called “oil shortage” currently occurring is not a short-term oil shortage caused by tight oil sources. It is due to the deficiencies in the pricing mechanism that led to the emergence of non-market losses in refined oil processing and sales companies, resulting in the refinery of domestic oil companies. There is no enthusiasm for production and sales in the sales segment, resulting in a situation where the supply of refined oil cannot increase with the increase in demand. The phenomenon of oil supply shortage or even “oil shortage” will appear on the market.
Liu Yufang, a researcher at the Economic Research Department of the Beijing Economic Information Center, said that the current supply of refined oil is tight. On the one hand, it is due to supply. The international crude oil prices continue to fluctuate at high levels, causing some high-cost local refineries to cut production and supply oil to the oil market. Bring considerable pressure. At the same time, some refineries of CNPC and Sinopec in the north began to install and overhaul the equipment, resulting in a reduction in the amount of finished product delivered.
On the other hand, China's refined oil pricing mechanism has intensified the tight situation. The international oil price has reached new heights, and the company's production costs cannot be transmitted to the retail side, causing some social gas stations to face losses and can only stop or limit sales. The oil market has brought considerable pressure. The Ministry of Finance has successively issued two policies: First, in the second quarter, PetroChina and Sinopec imported 3.5 million tons of gasoline and diesel to implement the import value-added tax levy and return; and secondly, from April 1st on the import of crude oil processed by PetroChina and Sinopec, etc. The loss was given a proper subsidy. The use of financial subsidies to guarantee prices indicates that the prices of domestic refined oil will not be raised recently. Although this move can alleviate the operational difficulties of the two major companies to some extent, it cannot solve the problem fundamentally.
Liu Xiaofang interpreted the phenomenon of “oil shortage” in Beijing from another angle. She said in an interview with this reporter that at present, the overall supply of the oil market in China is tight, especially diesel, and restricted sales in some regions. The situation should be staged tensions. On the one hand, the demand for refined oil will increase. In May, during the busy season of “Three Summers”, the demand for diesel in the rural market will be strong; construction work, especially preparations for the Olympic Games, will enter the sprint phase. Infrastructure projects The use of oil is also on the rise, bringing about a sharp rise in diesel demand; the number of car ownership continues to maintain a strong growth momentum, and the number of people traveling in warmer weather has increased, driving gasoline sales to continue to rise. On the other hand, the supply of refined oil is facing the expulsion of vehicles from outside Beijing to Beijing. Because the retail price difference between Beijing and neighboring provinces and cities is around RMB 300/ton, vehicles in surrounding areas in Beijing flock to the Beijing regional gas station to refuel and Beijing’s past. After the vehicles were filled with oil, they came out of Beijing. At the same time, due to profit-driven influences, some high-quality Beijing-standard (IV) resources have emerged, which has increased pressure on the supply of oil products in Beijing.
Beijing's oil resources are mainly allocated by PetroChina and Sinopec. Under the current situation that the international oil price has hit new highs and the cost of refining oil continues to rise, together with the impact of the current large number of gas stations on oil and gas recovery and transformation to the supply of oil products, Beijing Refined Oil The supply situation is relatively tight, but with the concerted efforts of all parties, preparations are made to increase reserves and early warnings to ensure the smooth hosting of the Olympic Games. There will be no problem with the refined oil protection in Beijing, but the tight balance between oil supply and demand may continue.
Liu Binghong said that from the following set of data, we can also see the tight supply and demand situation in the country: In the first quarter of this year, China imported 9.079 million tons of refined oil, an increase of 13.8% over the same period of last year. Among them, the import of refined oil in March was 3.131 million tons, an increase of 19%. In the first quarter of this year, China exported 3.611 million tons of refined oil, which was a 5.6% drop. In March, it exported 1.185 million tons of refined oil, a drop of 20.2%. We have observed that the growth rate of imports and the deceleration of exports have shown significant signs of increase, especially in March. At the same time, domestic newly implemented foreign trade policies have also taken into account the tight domestic oil supply situation. Since January 1, 2008, China has reduced most of its tariff rates on refined oil imports, of which the import tariff rates for gasoline, diesel and jet fuel are from 2%. With a reduction to 1%, the naphtha import tariff rate has dropped from 6% to 1%, and the import tariff rate for fuel oil has remained at 3%, which has played a positive role in promoting the import of refined oil. From the above comprehensive analysis, from the national point of view, there may be some areas that can not meet the demand for oil, but because of the special identity of the Olympic Games held in Beijing, it is necessary to guarantee the supply of refined oil. The short-term oil shortage in Beijing is Temporary, and the country’s emergence of tight supply and demand for refined oil is long-term.

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