Rate of Change Turns Negative—Retail Prices for Refined Oil Products to Be Lowered This Round

October 13, news

The current round of China's refined oil price adjustment window will open at 24:00 on October 13, and the retail price of refined oil is about to decrease. Since 2025, the retail price of refined oil in China has experienced six increases, seven decreases, and six suspensions. During this cycle, the crude oil market first rose and then fell, causing the crude oil change rate to turn from positive to negative, leading to the "eighth" decrease in the retail price of refined oil in 2025.

Entering this pricing cycle, international oil prices first rose and then fell. As of the 10th, the settlement price for the main contract of US WTI crude oil futures was $58.90 per barrel, while the settlement price for the main contract of Brent crude oil futures was $62.73 per barrel. During this adjustment cycle, the trend of oil prices first increased and then decreased. On one hand, geopolitical factors remain a significant influence on the crude oil market; the tension in the Russia-Ukraine situation, along with the Federal Reserve's interest rate cut, stimulated the rise in oil market prices. On the other hand, OPEC+ has initiated a new round of production increase of 1.65 million barrels per day. The market still worries about the risk of long-term supply surplus. The easing of the situation between Palestine and Israel, coupled with weakening demand in the United States, and the impact of US tariff issues on the global economy and demand expectations, led to a sharp decline in international oil prices. As of the 13th, by the tenth working day, the change rate for various types of crude oil was -1.40%, corresponding to a decrease in the price of gasoline in China by 75 CNY per ton and diesel by 70 CNY per ton, which translates to a reduction of 0.05 yuan per liter for 89#, 0.06 yuan per liter for 92# and 95#, and 0.06 yuan per liter for 0#.

In terms of gasoline: Refineries have gradually increased operating rates at some local refineries, leading to a slight rise in overall refinery utilization. Currently, average operating rates at Shandong-based local refineries stand at around 54.5%, while major national refineries maintain an operational rate of approximately 86%. Meanwhile, the supply of refined gasoline from local refineries has seen a modest increase.

With the National Day holiday now over, consumer travel and other activities have largely returned to normal. However, recent downward trends in the crude oil market have intensified a cautious atmosphere in China’s gasoline sector, further dampening trading activity. Additionally, the growing popularity of new-energy vehicles continues to weigh on demand, resulting in weaker-than-expected market performance. As a result, gasoline prices are predominantly experiencing volatile declines.

On the diesel front: Recently, the diesel market has seen a slight increase in supply, while demand has softened due to increased rainy and overcast weather, which has dampened immediate end-user needs. Meanwhile, the agricultural autumn harvest is gradually gaining momentum, leading to a modest rise in fuel consumption for farming activities compared to earlier periods. Meanwhile, demand from infrastructure projects and logistics remains subdued. Additionally, with the end of the northern fishing ban in September, marine fuel consumption has picked up somewhat. As a result, both bullish and bearish factors are at play, causing diesel prices to fluctuate primarily downward.

Looking ahead: The recent peak season for traditional U.S. gasoline consumption has ended, but supply-side risks remain unresolved. As a result, international oil prices are expected to fluctuate in the short term, while cost support for China's refined oil market weakens. In China, refinery operating rates are likely to continue rising in the near term, keeping the supply of refined products ample. Meanwhile, with no significant increase in gasoline demand, gasoline prices are poised to trend downward amid volatile trading. On the other hand, diesel demand has picked up compared to earlier levels, suggesting that diesel prices may experience more moderate, range-bound movements in the coming period.