Rumors & Reality Exciting China Refining Industry

● High crude oil prices will not cause changes in China’s gasoline and diesel pricing mechanism and consumption tax.
● Shandong Province is planning a 40 million tons/a refinery in Yantai.

This month in China all eyes are on China’s gasoline and diesel prices, and the planned 40 million tons/a refinery in Shandong Province.

According to the pricing mechanism, China’s retail ceiling prices of gasoline and diesel were raised by RMB 50/mt on May 27, backed by the high crude oil prices. 

And rumors are going that China will revise the consumption tax or adjust the pricing mechanism to reduce the gasoline and diesel retail prices. 

But SCI holds that any changes in the pricing mechanism and consumption tax will have great influences in the market, and it is not likely to change the pricing mechanism or consumption tax just because of the high crude oil prices.

Still on China. 

Shandong Petrochemical Energy Group will lead the Yantai-based Yulong refining project, according to Mr. Li Xiangping, president of Shandong Dongming Petrochemical.

Shandong Petrochemical Energy Group is planning to get licenses from the National Development and Reform Commission in the first half of 2019 and start construction in 2020, aiming to put the new refinery into production in 2022.

This new refining project will help to upgrade the refining industry of Shandong Province, and the small refineries with high energy consumption and serious environmental pollution will be closed. 

OK. Thanks for kicking off your June with us and have a great month ahead.