Domestic product oil pricing mechanism exists in name only

“The oil price management measures announced in May 2009 are just trials, which in itself shows that the method is not perfect. After more than a year of trial operation, we have also found a lot of problems. The specific operation of the refined oil pricing mechanism does have Further room for adjustment.” On August 26, 2010, an official from the National Development and Reform Commission told reporters.

Recently, the domestic refined oil market has reached a downward adjustment condition and has not been adjusted, making the domestic refined oil pricing mechanism enter a “dormant period”. This has caused the industry’s extensive discussion on “whether or not the new refined oil pricing mechanism is still being implemented”.

The NDRC's statement confirms that the current implementation of the refined oil pricing mechanism has reached the verge of revision.

The NDRC also disclosed that the NDRC will make adjustments to the pricing system for domestic refined oil products, including whether 22 working days are too long. "The overall direction of change is more flexible and more able to reflect changes in the costs of markets and companies."

Pricing mechanism "fuzzy"

"The National Development and Reform Commission's own system will require adjustments to oil prices in 22 days and 4%, but now it is often up to the conditions or not to move, leaving us completely puzzled." A Shenzhen gas station official told reporters.

In May 2009, the "Petroleum Prices Management Measures (Trial)" issued by the National Development and Reform Commission was called the new domestic refined oil pricing mechanism. According to the “Measures” mentioned above, when the average price of crude oil in the three markets of the international market changes for more than 4% for 22 consecutive working days, the Price Division of the National Development and Reform Commission can adjust the price of refined oil such as gasoline, diesel, and aviation kerosene accordingly.

In fact, in the initial period after the method was released, the National Development and Reform Commission did adjust the oil prices more timely according to regulations. But some time later, this price adjustment mechanism began to become blurred.

Taking the recent example as an example, since the NDRC lowered the maximum retail price limit for refined oil products on June 1, 2010, it has been maintaining the stability of the maximum retail price of refined oil products for the past three months.

During this period, the maximum retail price of refined oil in the domestic market was not adjusted because it did not meet the conditions for the price adjustment of the NDRC.

In fact, at the end of July 2010, the two conditions for lowering the price of refined oil were once reached, and public opinion has also prompted the price adjustment window to appear. However, the National Development and Reform Commission not only failed to adjust the price of refined oil, but instead issued a statement that it had not yet reached the conditions for price adjustment.

At present, this “fuzzification” approach has led some industry players to question that the new refined oil pricing mechanism has “existed in name only”.

In addition, since the promulgation of the new pricing mechanism, there have been many ambiguous terms. For example, according to the new refined oil pricing mechanism, when the crude oil price in the international market is higher than 80 US dollars per barrel, the processing profit rate will be deducted until the zero profit is processed. Calculate the price of refined oil; when the price per barrel exceeds 130 US dollars, in accordance with the interests of both producers and consumers, appropriate fiscal policies are adopted to ensure the production and supply of refined oil. The prices of gasoline and diesel are not mentioned or mentioned in principle.

Dilemma

The ambiguous handling methods of the National Development and Reform Commission are considered by many people as "the pursuit of chase inflation and the maintenance of monopolistic interests of oil companies." On the other hand, oil companies also have a few words about the current pricing mechanism.

At the announcement of Sinopec’s interim results on August 23, Wang Xinhua, chief financial officer of Sinopec, publicly stated that “The National Development and Reform Commission is reviewing the implementation of the refined oil pricing mechanism for more than one year and believes that the mechanism will gradually become market-oriented”.

Sinopec and PetroChina both feel that the current mechanism is not yet market-oriented, and social opinion believes that the National Development and Reform Commission has always been “lower adjustments and slower adjustments, and the rate of increase has been reduced by a small margin” for the current price adjustment of refined oil products. In the situation where “both parties are not pleased” among oil companies and consumers, the above-mentioned officials of the National Development and Reform Commission poured out their difficulties. “Since there is a certain lag in price adjustment and considering the overall economic situation and the people’s livelihood, the rate of increase is often not in place. In the downward adjustment, many factors must also be taken into account, including the production costs and appropriate compensation for the enterprises, and the prevention of subsequent ups and downs."

“In addition, judging from the current pricing mechanism that adjusts prices with 22 days and 4%, there are two major advantages of marketization and transparency, but the disadvantages are also very obvious. It is easy to create speculative opportunities for the market. When the price of oil rises, there will often be a phenomenon of flooding around the country.” The above official said, “If the price is adjusted strictly according to the current two indicators, it may lead to normalization of speculation.”

With regard to the dilemma that the National Development and Reform Commission has been successful in adjusting the prices of refined oil products, Lin Boqiang, an energy expert who has participated in the seminar on pricing mechanisms of the National Development and Reform Commission, believes that transparency and speeding up the adjustment may be the ultimate way out of the embarrassing situation.

"Undoubtedly, the new oil product system has produced some positive effects, including stable performance of the two major groups, while market competition is also heating up. However, if the price system is not transparent, it will not only be detrimental to the enterprise, but will also intensify public Controversy.” Lin Boqiang pointed out.

In terms of specific operations, Lin Boqiang believes that, first of all, it can appropriately shorten the rate of 4%, so that the market can more sensitively reflect the changing trend of international oil prices and domestic oil prices; and then shorten the time of price adjustment, can shorten the original 22 days to 10 days about.

In fact, Lin Boqiang's viewpoint is also a common knowledge of many industry experts.

“It is better to avoid speculation by obfuscating it. It is better to make the pricing mechanism transparent, shorten the price adjustment cycle, and speed up the frequency of price adjustment. On the basis of symmetry of information, we can better guarantee the credibility of the NDRC,” said Chen Qing. The officials of the National Development and Reform Commission pointed out that the mechanism for determining the formation of refined oil prices is gradually becoming more market-oriented. However, it is not simply a matter of linking up with the international market because the price of refined oil is also loaded with the balance between the affordability of all parties and the economic efficiency of enterprises, and Safeguarding national energy security and other factors. "We must try to adopt a more flexible price formation system, but at this stage China's refined oil pricing cannot yet be completely brought to market."

Casino Game Supplies

Casino or game table is a great place to getaway from stress and routine life. A professional game room or casino company must be equipped with Professional Casino Game Supplies in order to attract players who are looking for fun and excitement. Our Custom Casino Game Supplies are must-haves for a Casino or a game table. 

We Carry all kinds of Acrylic Casino Game Supplies to help enhance your game. Our Casino Game Products include: Acrylic Poker Chips , Acrylic Poker Chip Storages, Acrylic Casino Dices , Acrylic Casino Buttons And Markers, Acrylic Blackjack Discard Holders, Acrylic Blackjack Dealing Shoes, Acrylic Money Paddle Plunger, Acrylic Baccarat Paddles, Acrylic Raffle Drums and more. 

New Bolly Display is the professional and the most trusted manufacturers of casino game supplies. Whether you're looking to purchase high quality casino equipment for personal or commercial use,  New Bolly Display is here to help you! We provide the custom service, and you can use the Custom Made Casino Products for brand promotion and advertisement purposes.

Casino Game Supplies

Casino Game Board,Casino Game Pcb Casino Board,Game Set Casino Roulette,Casino Poker Chip Storage

New Bolly Display , https://www.newbolly-display.com