The oil price in Taiwan Province is even lower than that of the mainland! According to the latest Taipei oil price information released on July 1, No. 75 gasoline is NT$30.6 per liter, which is less than 7 yuan in RMB.
Mainland oil prices have risen for the second time in a row, breaking through the 8 yuan mark again.
There are almost no crude oil resources in Taiwan Province, so why is the oil price cheaper than that of the mainland?
Taiwan Province is located on the continental shelf off the southeast coast of the mainland, is an island province of the mainland, straddling temperate and tropical, with a population of about 23.41 million, more than 70% of the population is concentrated in the five major metropolitan areas in the west, with a total land area of 36,000 square kilometers.
The topography of Taiwan Province is long from north to south and narrow from east to west, with 2/3 of the land being mountainous and hilly, and 1/3 of the land being plain.
According to preliminary statistics, there are 39 known minerals and 734 mineral sites, including 155 deposits and 225 mineral sites.
The main mineral resources include coal, oil, natural gas and geothermal.
Due to the premature exploitation of coal resources in Taiwan Province, there is now a trend of depletion, and Taiwan Province's coal reserves are only about 100 million tons, and the annual output is less than 100,000 tons.
Moreover, these coals are basically distributed in the Miocene strata in the northwest of Taiwan Province, which are not rich in coal resources, and most of them are low-grade bituminous coal with high volatile.
Among the coal resources of Taiwan Province, oil and natural gas are Taiwan's more important energy deposits, and the geological exploration area of oil and natural gas has been completed more than 500 square kilometers, and the proven oil reserves were more than 300 million liters by 1999, most of which are distributed in the western part of the Central Mountains and the Taiwan Strait.
Such a small amount of oil reserves must not be enough, so Taiwan imports a large amount of crude oil from abroad every year, according to data released in 2018, Taiwan Province imported 44.38 million tons of crude oil that year.
The mainland's oil reserves are not sufficient, and the mainland, like Taiwan Province, is highly dependent on oil imports.
Logically speaking, the price of oil in Taiwan Province should be about the same as that of the mainland, but why is it cheaper than that of the mainland?
First of all, it is because the freight cost of importing oil from the mainland is much more expensive than the freight cost of importing oil from Taiwan Province itself.
Taiwan Province is surrounded by the sea and is also one of the necessary routes for many shipping routes.
Thanks to its unique geographical advantages, Taiwan Province's maritime transportation is very developed, and its foreign trade is also highly dependent on maritime transportation.
By the end of 2019, Taiwan had a total of 285 passenger and cargo ships with a gross tonnage of more than 100 tons, with a gross tonnage of 4.724 million tons and a deadweight tonnage of 7.11 million tons.
The main international commercial ports are Kaohsiung Port, Keelung Port, Taichung Port, Hualien Port and Suao Port.
Taipei Port and Tainan Anping Port have a longer history, having been opened up as early as the 90s of the last century.
Among them, the largest port in Taiwan is Kaohsiung Port, which is also the fifteenth largest port in the world, which is responsible for more than 60% of Taiwan's cargo handling and more than 75% of container handling.
We usually drive to refuel, and we feel that the price of oil is very high, but in fact, the price of crude oil is not as high as everyone thinks.
The high cost of oil imports from the mainland is due to the fact that the freight cost of importing oil from the Middle East is too high.
Taking Saudi Arabia, a major importer of mainland oil, as an example, if you want to import oil from Saudi Arabia and send it to China, you have to reach Tianjin Port by sea, a distance of nearly 6,500 nautical miles.
Every time the mainland imports oil from Saudi Arabia, the average freight per ton is as high as 9,000 US dollars, which must be included in the cost of crude oil, which is ultimately reflected in the price of gasoline.
Taiwan Province is surrounded by the sea and is one of the important shipping ports in itself, and Taiwan Province wants to import oil, which is much more convenient than that of the mainland, and the shipping distance alone is nearly 900 nautical miles.
Therefore, the cost price per ton of oil imported by the mainland is more expensive than that of Taiwan, which will naturally lead to the difference in gasoline prices between the two places.
Another reason is related to the tax policies of the two places.
We all know that gasoline is expensive on the mainland because we have a fuel tax in every liter of gasoline.
There is no additional fuel tax to refuel in Taiwan Province.
One collects taxes and the other does not collect taxes, which also leads to the difference in oil prices between the mainland and Taiwan Province.
When buying a car in mainland China, you only need to pay a one-time purchase tax, and other taxes are tied to fuel, so that you can use more cars and run more kilometers on the road, the more taxes you will bear.
If you don't drive, this expense won't be incurred again.
Although there is no fuel tax in Taiwan, there are many other taxes.
Taiwan Province is different from the mainland, although we have been to the new energy track, it can be regarded as a headwind, occupying a certain global automobile market share, but the performance of domestic cars in the past is also okay, and there are also many domestic cars that are liked by consumers.
However, Taiwan Province is completely different, and the automobile manufacturing industry is quite stretched, and even the local residents of Taiwan Province are reluctant to buy it.
Therefore, the cars in Taiwan Province are basically imported, which leads to a very high tax rate on cars in Taiwan, and you need to pay 17.5% tariff, 25% excise tax and 5% business tax to buy a car with a displacement of two liters.
The sales tax on a single car is as high as 54.2%.
This is not the end of the year, the people of Taiwan Province have to pay fuel tax and license tax every year.
Taking a car with a displacement of 1.6 liters as an example, these two taxes alone have to pay 2,800 yuan per year.
Even if you keep parking this car in the basement and eating ashes, you will pay this money.
Buying a car in the mainland, after paying the purchase tax and other expenses when buying a car, the tax that will be generated every year is only fuel tax, and the more times you drive, the more frequent you use the car, the more taxes you pay, and if you don't drive often, then the money is very small.
The different tax policies of the two places determine that the price of gasoline in Taiwan Province is lower than that in the mainland.
In addition to the above two points, objectively speaking, the oil price in Chinese mainland is indeed very expensive, and the hidden reasons behind it are also more complicated.
First of all, crude oil is a commodity, and its price will naturally be affected by market supply and demand, so we usually refuel, oil prices are high and low, and financial prices are not an absolutely fixed number.
After all, crude oil is indispensable for all walks of life, whether it is transportation, oil-fired power generation, or industrial production, these industries need crude oil as fuel.
The more prosperous the global economy, the higher the demand for crude oil, so oil prices will naturally rise.
The geopolitical relations of oil-producing countries such as Saudi Arabia and Iran, the environment and climate change will affect the supply of crude oil, so the political and economic situation of oil-producing countries is also one of the reasons for affecting the oil prices of the mainland.
At the same time, because of global climate change, all countries are actively exploring the road of sustainable development of green energy, and the mainland is focusing on the new energy vehicle track.
These policy changes will also affect domestic oil price changes.
So in the end, the oil price of the mainland, especially the oil price of the mainland, is a bit high.
Resources:
[1] Observer.com, "Sinopec: Tell me why China's oil prices are higher than those of the United States, don't scold, don't quarrel", 2019-01-19