Rate of Change Remains Negative, Leading to Another Retail Price Cut for Refined Oil Products This Round

October 27th, news

The current round of China's refined oil price adjustment window will open at 24:00 on October 27. The retail price of refined oil in this round is about to decrease. In 2025, the retail price of refined oil has experienced six increases, eight decreases, and six suspensions. During this cycle, the crude oil market first fell and then rose, with the crude oil change rate remaining negative. The 2025 refined oil retail price adjustment will see its "ninth" decrease.

As the current pricing cycle began, international oil prices initially fell before rebounding. By the 24th, the settlement price for the December WTI crude oil futures contract stood at $61.50 per barrel, while the December Brent crude oil futures settled at $65.94 per barrel.

During this adjustment period, crude oil prices first declined and then reversed course, climbing toward the end of the cycle. At the start of the cycle, OPEC+ initiated a new round of production increases totaling 1.65 million barrels per day. However, market concerns persisted over the long-term risk of supply surplus. Meanwhile, the easing of tensions between Israel and Palestine, combined with weakening U.S. demand and lingering uncertainties surrounding U.S. tariffs—issues that continue to weigh on global economic growth and demand expectations—triggered a sharp drop in international oil prices.

In the latter part of the cycle, though, as Western nations maintained their sanctions against certain oil-producing countries, coupled with reduced fears about the negative impact of U.S. tariffs and trade disputes, oil market sentiment shifted upward.

By the 27th, the 10th working day of the cycle, the rate of change for crude oil benchmarks reached -6.19%. This translates to a decrease of 265 CNY per ton for gasoline and 255 CNY per ton for diesel in China. In terms of retail pricing, this equates to a reduction of 0.19 yuan per liter for 89-octane gasoline, 0.20 yuan per liter for 92-octane gasoline, 0.21 yuan per liter for 95-octane gasoline, and 0.22 yuan per liter for No. 0 diesel.

Gasoline: Shandong independent refineries are operating relatively stably, with the operating rate maintained and the average operating rate of Shandong independent refineries around 54%. The operating rate of major refineries across China is maintained at about 86%, leading to a slight increase in the supply of refined oil products from independent refineries. Recently, residents' activities such as travel have been mainly normal, but the Chinese gasoline market has become more cautious, with transactions further affected. Additionally, the increasing popularity of new energy vehicles has led to lower-than-expected demand, resulting in a generally downward trend for gasoline prices.

In the diesel market: Recently, the supply of diesel in China has slightly increased, while demand is still mainly driven by essential needs. With the gradual start of the autumn harvest in agriculture, the consumption of agricultural fuel has increased compared to before. The demand from infrastructure and logistics sectors is moderate. Additionally, with the end of the fishing ban in northern China, the demand for marine fuel has also increased. Moreover, as the diesel in northern regions is transitioning to -10# diesel, these factors have led to a slight rise in the diesel market.

Looking ahead: The peak season for traditional U.S. gasoline consumption is nearing its end, while supply-side risks remain unresolved. As a result, international oil prices are expected to fluctuate weakly in the short term, providing limited cost support to China's refined oil market. In China, refinery operating rates have remained relatively stable in the near term, leading to an ample supply of refined products. Coupled with the lack of significant growth in gasoline demand, gasoline prices are likely to trend downward amid volatile conditions. Meanwhile, diesel demand has shown some improvement compared to earlier periods, suggesting that diesel prices may edge slightly higher in the coming weeks.