This Round Sees the First Retail Price Drop for Refined Oil Products This Year

April 21 news

The latest round of adjustments to China's refined oil prices took effect at 24:00 on April 21. The retail price of refined oil will be reduced in this round. In 2026, the retail price of refined oil in China will have seen six increases, one decrease, and one suspension. During this cycle, crude oil prices have declined, and the crude oil change rate has remained negative, leading to the "first reduction" in the retail price of refined oil.

As we enter this pricing cycle, international oil prices have declined. As of the 20th, the settlement price for the June contract of U.S. WTI crude oil futures stood at $87.42 per barrel, while the settlement price for the June contract of Brent crude oil futures reached $95.48 per barrel. During this pricing cycle, crude oil prices have shown a downward trend, primarily driven by a rapid shift from the previous geopolitical conflict premium to a combination of easing negotiation prospects and negative fundamental factors. Under the combined influence of four key factors—the signals of resumed U.S.-Iran talks, the partial resumption of navigation through the Strait of Hormuz, the IEA’s downward revision of supply-and-demand forecasts, and the sharp increase in API crude oil inventories—earlier risk premiums have largely dissipated, leading to a downward trend in crude oil prices. Coupled with weak global demand and concerns that escalating geopolitical tensions could weigh on the economy and oil consumption, overall crude oil prices have continued to decline this cycle. As of the 21st, the 10th working day, the change rate for crude oil varieties was -12.1%, corresponding to a reduction of RMB 555 and RMB 530 per ton for gasoline and diesel in China, respectively. In terms of per-liter price adjustments, this translates to a decrease of RMB 0.42 per liter for No. 92 gasoline, RMB 0.46 per liter for No. 95 gasoline, and RMB 0.45 per liter for No. 0 diesel.

Gasoline: Affected by the decline in crude oil prices, the refining market in Shandong has declined, with spot prices quickly adjusting downward. In addition, the slow sales progress of major companies and the increase in inventory have led to a gradual adjustment of prices closer to the market transaction levels to alleviate pressure. Industry players generally have a bearish outlook on the future prices of refined oil products, and recently, there has been a wait-and-see attitude in the market, resulting in a lukewarm overall trading performance and continuously falling gasoline market prices. However, recent activities such as resident travel have been normal, and the increasing popularity of new energy vehicles has led to lower-than-expected demand. Under the influence of negative factors, the gasoline market trend has declined.

Diesel: Recently, the supply side of the diesel market in China has been relatively normal. Although demand has recovered with the resumption of logistics and the gradual start of construction sites and projects across the country, leading to a gradual warming up of diesel demand; the willingness of downstream buyers to purchase has weakened, and their interest in buying high-priced diesel is low. After the rapid increase in diesel prices earlier, the profit margins of gas stations have been severely squeezed, resulting in a lack of enthusiasm for purchasing, and the market price of diesel has fallen.

Looking ahead, the market will be closely watching negotiations on the geopolitical tensions in the Middle East. Shipping through the Strait of Hormuz remains stalled at present. If the Middle Eastern conflict persists for an extended period, it will not only drive oil prices higher but also intensify global inflationary pressures, thereby weighing on global economic growth. In the short term, crude oil prices are expected to continue experiencing wide fluctuations. From China’s perspective, the refinery utilization rate is unlikely to change significantly in the near term, and the supply of refined petroleum products remains stable. We anticipate that gasoline and diesel prices will likely fluctuate within a narrow range in the near term.