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SunSirs: Consumption Tax on Some Refined Oil Products Increased Sharply in Domestic Market
May 20 2021 13:50:26SunSirs(HU)

On May 17, the price of domestic refined oil products increased strongly. The price of domestic 92# gasoline reached 7738.8 RMB/ton, with a one-day increase of 2.94%. The price of domestic 0# diesel oil reached 6121.6 RMB/ton, with a one-day increase of 4.45%. In the second quarter, the maintenance of on-site equipment increased, supply was tight, multiple positive superpositions, and the price of domestic refined oil rose strongly.

Recently, the Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly announced Levying import consumption tax on some refined oil products (hereinafter referred to as the announcement):

  1. For imported products classified under tariff code 27075000, and less than 95% by volume of aromatic hydrocarbons distilled below 200 ℃, the consumption tax on import is levied at 1.52 RMB/liter unit tax on naphtha.
  2. For the imported products classified into the tariff codes 27079990 and 27101299, the consumption tax of import link shall be levied at the unit tax of 1.52 RMB/liter as naphtha.
  3. For imported products which are classified into tariff code 27150000 and distilled at 440 ℃ or below, the volume of mineral oil is more than 5%, the consumption tax of import link shall be levied at 1.2 RMB/liter unit tax of fuel oil.

According to the tax code mainly mentioned in the notice, the corresponding products are represented by mixed aromatics, light cycle oil, and cut back asphalt. The policy interpretation issued by the tariff Department of the Ministry of Finance points out that light cycle oil, mixed aromatics, and cut back asphalt usually contain more aromatics or asphalt components, and are generally not used as fuel oil; However, in recent years, a small number of enterprises import a large number of such products, process and produce fuel that does not meet the national standards, flow to the illegal business channels, endanger the fairness of the refined oil market, and cause greater social security risks and environmental pollution. To solve the above problems, the three departments announced that the relevant products will be included in the scope of consumption tax collection, which is conducive to standardizing the market order and promoting fair competition.

After the implementation of the news, the cost of the domestic refined oil market rose, and various manufacturers raised the ex-factory price one after another, with an increase of 100-250 RMB/ton. In addition, the international crude oil market also had corresponding positive support. The international oil price rose significantly. The settlement price of the main contract in the U.S. WTI crude oil futures market was US $65.37/barrel, up to US $1.55 or 2.4%. Brent crude oil futures market-main contract settled at $68.71 a barrel, up to $1.66, or 2.5%, oil prices fell after a strong rebound, recover the most losses on Thursday, on the one hand, the stock market goes strong boost to the oil market, the more the main is influenced by the major American fuel pipe after recovery, but the parts of the country a shortage of gasoline is still too much, to boost oil prices.

The supply and demand of refined oil are favorable: in the second quarter, the centralized maintenance period of atmospheric and vacuum devices is in place, the refinery commencement rate maintains a low level, and the supply side is in a tight trend. In terms of gasoline demand, the domestic temperature is suitable, and the radius of people's travel has increased, and there is a certain demand for stock and stock in the market. In terms of diesel, the diesel demand in the construction and logistics industries continues to warm up, and the demand for diesel terminals is strongly supported. The demand is good and the domestic oil price has risen greatly.

In the near future, the average start-up load of atmospheric and vacuum distillation units of main refineries in China is about 75%. In May, the main refineries will resume work and overhaul the refineries, and the supply side may not change much.

According to Chen Ling, a refined oil analyst at the SunSirs, to a certain extent, the improvement of the consumption tax collection project is conducive to the normalization development of the domestic refined oil market. Coupled with the favorable support of international crude oil price, the domestic crude oil change rate is at a positive low, the demand for gasoline and diesel continues to improve, and the market fundamentals have some support. It is expected that the price of refined oil will still rise in the future.


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