The new plan finalizes the refined oil price adjustment or does not require the State Council to “sealâ€
International Energy Network News: The domestic oil pricing mechanism adjustment program has now been finalized.
On December 6th, an expert involved in the research and formulation of the adjustment mechanism of the pricing mechanism revealed that the adjustment of the pricing mechanism was only modified and improved on the basis of the original. In addition to the shortened price adjustment period, the pricing operation mode has also been changed. "Price adjustment" should be the direction of reform. However, the pricing power from the ex-factory price, wholesale price to retail price will also be determined by the country and will not be devolved to oil companies.
According to the analysis, the automatic price adjustment means that the refined oil retail price adjustment will no longer be reported to the State Council for approval, and the National Development and Reform Commission will automatically issue an announcement based on the formula.
The price adjustment may no longer be reported to the State Council. "The reform of the pricing system has only been revised and improved on the basis of the original, and there has been no fundamental change." The above experts said that the price adjustment cycle will be shortened, but the pricing cycle is unchanged, ie 22 On the working day, “the reduction of the price adjustment period to 10 days has become a consensus among oil companies, industry players and others.â€
"Reducing the price adjustment period is in line with the evolution of the market. It is also in line with the expectation of the two major companies and consumers. Basically, it is an ironclad thing to judge the introduction of the policy," said Liao Kaixin, an economist at Xiwang Energy.
The aforementioned experts revealed that the refined oil pricing reform plan will change the pricing operation mode and will automatically adjust the price.
Liao Kailu believes that the so-called automatic price adjustment is that the retail oil price limit will be determined by the National Development and Reform Commission according to the established rules, and the price adjustment standard will be automatically raised. It will no longer be reported to the State Council for approval. This will, to a large extent, increase the speed at which domestic retail prices are linked to domestic and international market conditions.
However, people in the industry are also worried about the NDRC's rapid price adjustment after meeting the price adjustment conditions, because the retail price of refined oil has brought too great a reaction to the domestic market and it has triggered the whole body.
Liao Kailu said that at present, in the sensitive period of domestic price inflation, if adjustments are made too frequently, especially when there are more frequent or larger adjustments, many destabilizing factors will result and the country will remain passive in stabilizing prices.
The pricing power is not devolved for the time being. For the issue of pricing rights, the above experts stated that there is no argument for the pricing of decentralized companies in the scheme. The pricing power from the ex-factory price, wholesale price to retail price will still be determined by the country.
It is understood that PetroChina’s price management department has drafted a “Recommended Product Price System Recommendation†report, recommending that the existing concept of wholesale price pricing and price control be cancelled, and that the national gasoline and diesel retail ceiling price should be increased and unified, and individual areas or individuals should be released first. Variety of refined oil prices (crack the oil price dilemma).
This plan has not been adopted. Zhuo Feng, an analyst at Infocom, believes that the two major oil companies will get pricing power and the price of oil will go even further. Now the industry believes that the price of oil rises quickly and slowly, and the situation becomes more serious after decentralization.
Traders and middlemen also do not agree with this proposal. They all indicated that the previous pricing mechanism for refined oil “has already taken a serious stand at the point of view of domestic oil companies†to protect their interests and “relief droughts and floods†all year round. If the pricing authority is then given to enterprises, then the monopolistic refined oil market will become more monopolized, which will run counter to the original intention of improving refined oil pricing mechanism.
However, Liao Kaixi said that the decentralization of pricing rights will be the ultimate direction of reform. It is only because there is no stronger competitive entity competing with the two major companies. Shandong's refining is too small, CNOOC is not strong, and it can only compete in certain regions. Nationally speaking, only when more competitive players enter the market can they eventually decentralize pricing power.
On December 6th, an expert involved in the research and formulation of the adjustment mechanism of the pricing mechanism revealed that the adjustment of the pricing mechanism was only modified and improved on the basis of the original. In addition to the shortened price adjustment period, the pricing operation mode has also been changed. "Price adjustment" should be the direction of reform. However, the pricing power from the ex-factory price, wholesale price to retail price will also be determined by the country and will not be devolved to oil companies.
According to the analysis, the automatic price adjustment means that the refined oil retail price adjustment will no longer be reported to the State Council for approval, and the National Development and Reform Commission will automatically issue an announcement based on the formula.
The price adjustment may no longer be reported to the State Council. "The reform of the pricing system has only been revised and improved on the basis of the original, and there has been no fundamental change." The above experts said that the price adjustment cycle will be shortened, but the pricing cycle is unchanged, ie 22 On the working day, “the reduction of the price adjustment period to 10 days has become a consensus among oil companies, industry players and others.â€
"Reducing the price adjustment period is in line with the evolution of the market. It is also in line with the expectation of the two major companies and consumers. Basically, it is an ironclad thing to judge the introduction of the policy," said Liao Kaixin, an economist at Xiwang Energy.
The aforementioned experts revealed that the refined oil pricing reform plan will change the pricing operation mode and will automatically adjust the price.
Liao Kailu believes that the so-called automatic price adjustment is that the retail oil price limit will be determined by the National Development and Reform Commission according to the established rules, and the price adjustment standard will be automatically raised. It will no longer be reported to the State Council for approval. This will, to a large extent, increase the speed at which domestic retail prices are linked to domestic and international market conditions.
However, people in the industry are also worried about the NDRC's rapid price adjustment after meeting the price adjustment conditions, because the retail price of refined oil has brought too great a reaction to the domestic market and it has triggered the whole body.
Liao Kailu said that at present, in the sensitive period of domestic price inflation, if adjustments are made too frequently, especially when there are more frequent or larger adjustments, many destabilizing factors will result and the country will remain passive in stabilizing prices.
The pricing power is not devolved for the time being. For the issue of pricing rights, the above experts stated that there is no argument for the pricing of decentralized companies in the scheme. The pricing power from the ex-factory price, wholesale price to retail price will still be determined by the country.
It is understood that PetroChina’s price management department has drafted a “Recommended Product Price System Recommendation†report, recommending that the existing concept of wholesale price pricing and price control be cancelled, and that the national gasoline and diesel retail ceiling price should be increased and unified, and individual areas or individuals should be released first. Variety of refined oil prices (crack the oil price dilemma).
This plan has not been adopted. Zhuo Feng, an analyst at Infocom, believes that the two major oil companies will get pricing power and the price of oil will go even further. Now the industry believes that the price of oil rises quickly and slowly, and the situation becomes more serious after decentralization.
Traders and middlemen also do not agree with this proposal. They all indicated that the previous pricing mechanism for refined oil “has already taken a serious stand at the point of view of domestic oil companies†to protect their interests and “relief droughts and floods†all year round. If the pricing authority is then given to enterprises, then the monopolistic refined oil market will become more monopolized, which will run counter to the original intention of improving refined oil pricing mechanism.
However, Liao Kaixi said that the decentralization of pricing rights will be the ultimate direction of reform. It is only because there is no stronger competitive entity competing with the two major companies. Shandong's refining is too small, CNOOC is not strong, and it can only compete in certain regions. Nationally speaking, only when more competitive players enter the market can they eventually decentralize pricing power.
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