Domestic refined oil prices have been lowered again and again to ease the burden of refueling car owners
After a continuous increase in the first four months of 2024, domestic refined oil prices finally ushered in a downward adjustment in May. In this round of price adjustment cycle, domestic refined oil prices have fallen "two times in a row", with a cumulative drop of 305 yuan/ton, which has ushered in a substantial reduction in oil prices.
The first price adjustment in May was reduced by 70 yuan/ton on the eve of the end of April. In mid-May, when the second price adjustment of this round of price adjustment cycle, the domestic refined oil price was once again sharply reduced by 235 yuan/ton, setting the largest single decline in 2024. Two consecutive downward adjustments, so that the domestic refined oil prices in May compared with the high before the end of April fell by 305 yuan/ton.
This is undoubtedly good news, which can effectively alleviate the long-term burden of refueling for car owners. As domestic oil prices continue to rise, people have a lot of opinions about the impact of excessive increases in oil prices on daily life. Successive downward revisions will help reduce the pressure on the cost of living from rising oil prices.
However, even after two sharp reductions of 305 yuan/ton from early to mid-May, the current domestic oil price is still at a relatively high level compared with the beginning of this year. Taking mid-to-late May as an example, according to incomplete statistics, the national average retail price of No. 92 gasoline was about 7.5 yuan/liter, nearly one yuan higher than that at the beginning of the year; The price of No. 0 diesel is around 7.03 yuan/liter, which is also higher than about 0.8 yuan at the beginning of the year.
Therefore, although oil prices have been continuously lowered, there is still room for further reductions to further ease the fuel expenses of car owners. In the next month, the trend of domestic refined oil prices will determine whether and how much of the reduction can be continued at the beginning of next month.
International oil prices are still fluctuating and falling
The fundamental reason for the decline in domestic refined oil prices is that international oil prices continue to fall. Since the pricing of domestic refined oil prices is mainly adjusted with reference to changes in international crude oil prices, the current domestic oil prices can continue to fall, precisely because international oil prices have continued to fluctuate and decline since March this year.
At present, the key factors that mainly affect the trend of international oil prices are mainly the following two aspects:
1. Expectations of a slowdown in global economic growth
As interest rate hikes in major economies such as the United States continue to this day, global economic growth is under downward pressure. The combination of the lingering financial crisis and high inflation has made the market's expectations for the future economic outlook more pessimistic. Oil demand, which is a barometer of the economy, is also expected to weaken, which is the root cause of downward pressure on international oil prices.
2. Concerns about overproduction in major producing countries
Although supported by positive factors such as Russia's production cuts, the continued rise in production from major oil producers such as Saudi Arabia and Iraq has re-ignited concerns about oversupply. This is also a major negative factor that weighs on the downward trend of oil prices. As long as the major oil producers cannot reach a unified action to reduce production in the future, the pressure of oversupply in the oil market will continue.
At present, international oil prices are hovering around $70 per barrel, which has fallen sharply from the high of more than $80 per barrel in March. Whether it can go further in the future depends largely on the movement of the above two variables. If the global economic outlook deteriorates further and supply concerns in the oil market intensify, international oil prices are likely to suffer another heavy setback.
At that time, the price of domestic refined oil is also likely to usher in a larger reduction, further easing the burden of refueling costs on car owners. However, if international oil prices stabilize and rebound at the current position, the room for domestic oil prices to decline may also be constrained to a certain extent.
The reduction in oil prices will reduce the pressure on the cost of refueling for car owners
The successive domestic oil price reductions have brought tangible benefits to car owners, which is to reduce the cost of filling up at gas stations. The "two consecutive declines" in May have reduced the cumulative oil price to 305 yuan/ton. Based on the current average of 50 litres of petrol per private car, it is equivalent to reducing the cost of each refueling by 15 yuan.
Judging from the current retail price of gasoline, based on the national average price of 7.5 yuan/liter of No. 92 gasoline, it costs 375 yuan to fill a tank of 50 liters of gasoline. If the price is 6.6 yuan/liter at the beginning of the year, the cost of the same 50 liters of gasoline is 330 yuan. In comparison, it is nearly 45 yuan higher.
It can be seen that the current oil price has been significantly higher than the level at the beginning of the year. If current fuel prices have been maintained year-to-date, fuel bills have risen significantly for car owners. According to the beginning of the year or so, the average private car is refueled once every two weeks, and the cost of refueling for a car is as high as hundreds of yuan.
Therefore, the continuous downward adjustment in May has undoubtedly reduced the cost pressure on car owners. As long as international oil prices can continue to fluctuate and fall in the future, domestic oil prices will also be further lowered to further ease the fuel burden of car owners.
From a broader perspective, the continuous decline in oil prices can also alleviate inflationary pressures to a certain extent. Because gasoline is a conductive price factor, its rise and fall will have a certain impact on the operating cost of the entire economy. When oil prices soar, this will not only directly increase people's living expenses, but also raise the overall price level by increasing the cost of various economic activities such as transportation and logistics.
Therefore, on the one hand, the reduction of oil prices directly reduces the pressure on people's living expenses, and on the other hand, it is also conducive to curbing the further spread of economic inflation. In general, successive domestic oil price reductions will have a positive effect on economic and social development.
However, we also need to be soberly aware that for now, only a certain amount of domestic oil prices have been lowered and repaired. However, compared with the beginning of the year, the current level is still significantly higher, and the people's gas expenses are still higher than at the beginning of the year. Therefore, it is expected that if domestic oil prices can be further lowered in the future, it will better alleviate the pressure on fuel expenses.
In general, the "two consecutive declines" in domestic oil prices in May were caused by the volatile downward trend of international oil prices in April and May. Compared with the high level in March, international oil prices have fallen at present, mainly due to multiple factors such as weakening global economic growth expectations and concerns about oversupply in the oil market.