Fuel prices in China have fallen again, amid fears of a decline in domestic demand with the increase in coronavirus cases.
Yesterday, Tuesday, January 17, the National Development and Reform Commission announced that, starting from midnight last night, the prices of oil derivatives in China will decline in most cities, according to the data seen by the specialized energy platform.
The decline in fuel prices in China comes after it recorded an increase at the beginning of 2023, following 3 consecutive declines since mid-November of the past year (2022).
Prices of diesel and gasoline in China
The National Development and Reform Commission decided to lower the prices of gasoline and diesel in the domestic market by about 205 and 195 yuan ($30.35 and $28.87) per ton, respectively.
Fuel prices in China are subject to a mechanism that is adjusted every 15 days, based on changes in the price of a barrel of oil globally. petrol and diesel) accordingly.
It is noteworthy that oil prices achieved gains of more than 8% during the past week, amid strong indications of growth in demand in China, the largest importer of crude oil, and expectations of less sharp increases in interest rates in the United States.
The National Development and Reform Commission, in a statement seen by the specialized energy platform, called on the three major oil companies PetroChina, Sinopec, Sinopec and other crude oil processing companies to regulate the production and transportation of refined oil, ensure stable supply in the market, and strictly implement the national price policy.
It required relevant departments in various places to strengthen market supervision and inspection, strictly investigate and punish behaviors contrary to the national price policy, and maintain normal market order.
On January 3, the committee decided to raise fuel prices in China (gasoline and diesel) by about 250 and 240 yuan ($36.10 and $34.66) per ton, respectively.
demand for oil
The decline in fuel prices in China, the largest oil importer in the world, comes amid expectations of an increase in demand during the current year (2023), after easing the measures imposed to confront the Corona virus.
Today, Wednesday, the International Energy Agency said that lifting restrictions imposed on the Corona virus in China would boost global oil demand this year to a new record, and it believed that price cap sanctions on Russia could weaken supplies.
China’s economic growth slowed sharply to 3% in 2022, missing the official target of 5.5%, and marking the second-worst performance since 1976.
Chinese fuel exports
On the other hand, China’s diesel exports rose for the second month in December, while gasoline exports rose for the third month.
The outbreak of the Corona virus in the country limited domestic demand for fuel, and refineries benefited from expanded annual export quotas.
Data from the General Administration of Customs showed today, Wednesday, that China exported 2.79 million tons of diesel in December, representing an increase of 32.8% from 2.10 million tons in November, the highest since March 2021.
Total diesel exports for the year amounted to 10.92 million tons, compared to 17.21 million tons for 2021, according to data seen by the energy platform, quoting Reuters.
China’s gasoline exports amounted to about 1.91 million tons in December, the highest level since October 2020, and up from 1.49 million tons in the previous month.
Total gasoline exports for 2022 amounted to 12.56 million tons, compared to 14.54 million tons in 2021.
Refineries continue to offload stock abroad to take full advantage of annual export quotas, after a year in which coronavirus restrictions choked domestic demand for fuel.
Although domestic travel initially rebounded after restrictions were suddenly eased at the end of November, the subsequent nationwide rise in COVID-19 cases in December dampened demand for domestic consumers and industrial fuels, as people stayed home to avoid infection.
To stimulate the pandemic-stricken economy, the government issued an additional 13.25 million tons of export quota for diesel, gasoline and jet fuel, bringing the total 2022 quota to 37.25 million tons compared to 2022 levels.
The government recently announced the first refined product export quota for 2023 of about 19 million tons, as it seeks to increase demand.
However, the volume of road traffic in some large cities appears to be increasing, and domestic consumption of refined products such as gasoline and kerosene is expected to rise during the Lunar New Year, which falls on January 21, when millions of people are expected to travel The Chinese for a week’s vacation.
China’s imports of liquefied natural gas
China’s imports of liquefied natural gas recorded their first major annual decline since the country began importing it in 2006.
Total LNG imports in 2022 amounted to 56.88 million tons, down 19.5% from 2021 figures.
December imports were 6.6 million tons, up only slightly from November, and up 13% year-on-year.
The drop, which industry analysts had predicted, comes after a year in which pandemic restrictions slashed manufacturing demand for the fuel.
Global LNG prices, although falling in recent months, were high for most of 2022 due to the war in Ukraine, further contracting demand from Chinese industrial consumers.
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