If international oil prices rise, will domestic oil prices rise?
After 40 years of rapid economic development, cars have become a common means of transportation. Along with it, oil, which was once out of reach for us, and the price of oil, have become things that are closely related to public life. Given the importance of oil to us, it is necessary to care about oil prices.
However, although many car owners are very concerned about the price of oil, how many people really know what factors affect the price of oil? What are the components of the oil price that we usually care about?
Speaking of the reasons that affect oil price fluctuations, most people think of international oil prices, thinking that when international oil prices rise, domestic oil prices will rise; when international oil prices fall, domestic oil prices will also fall. In fact, it is also correct to hold this view, because under normal circumstances, domestic oil prices rise or fall closely following the fluctuation of international oil prices;
But there are also times when domestic oil prices do not move the same as international oil prices. For example, if the international oil price has risen, the domestic oil price may remain stable; the international oil price has risen by a large margin, and the domestic oil price has not risen by a large margin, and other special circumstances. So what is the reason for this?
In order to understand the reasons for the changes in domestic oil prices, we must first understand a few concepts. The first is that international oil prices and the oil prices we are concerned about are two concepts. International oil prices usually refer to the price of crude oil, while the oil price we are concerned about is the price of refined oil. As for the specific meaning of the two words crude oil and refined oil, we will not say much, and their meaning can be seen from the names.
The second concept is what are the factors that make up the price of refined oil? Or what are the factors that determine it?
The price of refined oil that we usually come into contact with is mainly composed of the price of crude oil, the processing cost of crude oil, and various related taxes. From here, we can see that crude oil, as the raw material of refined oil, is an important factor in the price system of refined oil. So usually, when the price of crude oil rises, the price of refined oil will also rise. This is because the cost of refined oil has increased.
But sometimes there are exceptions, such as changes in the processing technology of crude oil in addition to changes in crude oil prices. If the processing technology of crude oil advances and the efficiency of processing crude oil is improved, the production cost of refined oil will be reduced, and the price of refined oil will fall.
In addition to crude oil and processing technology, the amount of oil-related taxes will also affect the price of refined oil, especially the relatively large value-added tax. In early 2019, China reduced its VAT in an oil price adjustment. Through this tax adjustment, the domestic refined oil price did not rise with the rise of international crude oil price, which is tantamount to lowering the oil price in disguise.
Therefore, we can draw a general conclusion: domestic refined oil prices are mainly affected by international crude oil prices, but at the same time, they will be adjusted through relevant policy changes according to the actual situation of our country. So that the price of oil is kept within an acceptable range.
Although the means of adjusting oil prices may be varied, and the trend of adjustment may be different, the general rule can be seen, that is, to keep oil prices fluctuating within a small range as much as possible.
That is, to maintain the overall stability of oil prices and not allow oil prices to change significantly. It will not be high and low, but gradual changes, whether it is rising or falling. This is also why we often see domestic oil prices rising four times, five times or several times. Only when oil prices are more stable can our economic development remain healthy and stable! (From China Energy Network)