China Independent Refineries to Raise Gasoline Prices in Jun

The average price of gasoline at Shandong independent refineries reached RMB 7,462/mt on May 23, and the average price of diesel reached RMB 6,593/mt. The prices of gasoline and diesel at the independent refineries hit the yearly high on May 23.

But then, international crude oil prices dropped sharply in late May, as Saudi Arabia and Russia announced to raise their crude oil output. The WTI futures dropped $3.51/bbl within a week. This led to the decrease in gasoline and diesel prices. From May 23 to May 31, the average price of gasoline at Shandong independent refineries dropped by RMB 214/mt, and the average price of diesel dropped by RMB 257/mt.

But SCI holds that the independent refineries will raise their gasoline and diesel prices in June. According to SCI, the average operating rate of CDUs at Shandong independent refineries was 63.41% on May 30. In June, some independent refineries will shut down their units for maintenance, especially the independent refineries in Dongying City and Binzhou City. In addition, some independent refineries in Weifang City and Zibo City will cut their operating rates. Therefore, the market supply of gasoline and diesel will decrease, which will give the independent refineries an incentive to raise their prices.

On the demand side, the restriction of the dangerous goods transportation will impact the logistics industry. This will drag down the market demand for gasoline and diesel. Therefore, the demand side will limit the increase in gasoline and diesel prices.