Rate of Change Remains Positive—Retail Prices for Refined Oil Products Are Set to Rise in This Round

May 8th News

The current round of China's refined oil price adjustment window will open at 24:00 on May 8. The retail price of refined oil is about to increase, and in 2026, the retail price of refined oil will see seven increases, one decrease, and one suspension. During this cycle, the trend of crude oil prices has been rising, and the crude oil change rate has remained positive. The retail price of refined oil is about to experience its "seventh" increase.

Entering this pricing cycle, international oil prices have risen. As of the 7th, the closing price for the June WTI crude oil futures contract was $94.81 per barrel, while the settlement price for the July Brent crude oil futures contract was $100.06 per barrel. During this pricing cycle, crude oil prices have shown an upward trend, primarily driven by the renewed closure of the Strait of Hormuz. Geopolitical tensions continue to push oil market prices higher, with concerns over supply shortages triggered by the geopolitical situation serving as a key support factor. These positive factors have outweighed the negative impact from the UAE's announcement of its withdrawal from OPEC and the OPEC+ alliance. As a result, both U.S. and Brent crude oil prices have risen sharply. Additionally, amid weak global demand, there are growing concerns that escalating geopolitical conflicts could weigh on the economy and oil consumption. Overall, crude oil prices have risen during this cycle. As of the 8th, the 10th working day, the change rate for crude oil varieties reached 8.20%. Accordingly, gasoline and diesel prices in China will increase by RMB 320 and RMB 310 per ton, respectively. In terms of per-liter price adjustments, No. 92 gasoline will rise by RMB 0.24 per liter, No. 95 gasoline by RMB 0.26 per liter, and No. 0 diesel by RMB 0.26 per liter.

Gasoline: Recently, Chinese refineries have resumed production in a concentrated manner, maintaining high processing volumes and increasing refined oil output. The operating rate of local refineries in Shandong remains around 60%, ensuring ample supply of refined oil products in China. Additionally, with the continuous rise in gasoline and diesel inventories in China, the inventory levels of local refineries in Shandong and major refineries reached a relatively high range by mid-April, forcing prices to fall. Market participants are mostly adopting a wait-and-see attitude, leading to a generally flat trading performance, and the market price of gasoline has declined. However, recent normal activities such as resident travel, combined with the increasing popularity of new energy vehicles, have led to lower-than-expected demand. Affected by these negative factors, the gasoline market has weakened.

Diesel: Recently, the supply of diesel in the Chinese market has increased. Although demand has recovered with the resumption of logistics and the gradual start of construction sites and projects across China, leading to a steady increase in diesel demand; the willingness of downstream buyers to purchase has weakened, showing low interest in buying high-priced diesel. After the rapid rise in diesel prices earlier, the profit margins of gas stations have been severely squeezed, resulting in low purchasing enthusiasm. Additionally, the start of the fishing moratorium in southern China has reduced the demand for diesel. Overall, diesel prices in the Chinese market have declined.

Looking ahead: Close attention should be paid to the negotiations regarding the geopolitical tensions in the Middle East. Currently, shipping through the Strait of Hormuz remains at a standstill. If the conflict in the Middle East persists for a long time, it will not only keep oil prices at high levels but also exacerbate global inflationary pressures, thereby dragging down global economic growth. In the short term, crude oil prices are expected to fluctuate widely. For China, refinery operating rates are not expected to change significantly in the short term, and the supply of refined oil products is normal. It is anticipated that the prices of gasoline and diesel will mainly fluctuate in the short term.