Northeast Asia Petroleum Forum 2009

The outlook of refined oil product supply and demandin China and the influence to market ofnortheast Asia
China Petroleum Planning & Engineering Institute27/10/2009
IEEJ: November 2009

Contents

IEEJ: November 2009

Ⅰ、Current situation and characteristic analysis of China refined oil productmarket

Ⅱ、Financial crisis influence to refined oil product market in China
Ⅲ、 The forecast of refined oil product supply and demand in China
Ⅳ、 China influence to refined oil product market in northeast Asia

2

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
 Oil refining capacity improved steadily in recent years in China
Refining capacity reached 430 million t/y in China 2008, and had increased 140
million ton during the last 5 years. These refineries are mainly distributed innorthwest , northeast ,coastal and along the Yangzi River of China.
There are 12 refineries which capacity are over 10 million t/y, such as Dalian, Dalian
Xitai, Zhenhai, Maoming, Qilu and Shanghai Refinery .
Refining capacity region layout in China

Northwest, 13%South China
, 16%

East
China, 40%

North
China, 9%Northeast, 22%3

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
refined oil product output kept a rapid growth in China
The output of crude oil reached 190 million ton in 2008, and 179 million ton was imported.
The output of the three major products, gasoline, kerosene, diesel oil, was increased from12087x104t in 2000 to 20837x104t in 2008. Average annual increasing rate reached 7%.

 Sinopec and CNPC are two major companies in mainland of China，the output of the twocompanies reached 18705 x104t in 2008, about 90% total output.

refined oil product output of main oil companies in 2008 of
China

company
Sinopec
Petrochina
local refineries
totalcapacity
20400
13750
9000
43150

(104t)

output
10825
7880
2132
20837
4

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
Rapid economic increase in China led to refined oil product consumption
in bloom, demand increasing rate was higher than that of output
 Chinese economy kept about 10% increase annually during past several year.
refined oil product consumption had a solid increase foundation.
 The refined oil product consumption increased from 11149x104 t in 2000 to
21508x104 t in 2008. Annual average increasing rate was 8.6%, which was 1.6
percent points higher than the production growth.
 refined oil product is mainly used by car, aircraft and agricultural machines.
They are key driving power for consumption increase in China.
2.30

107 t

14%
refined oil product consumption

2.10

12%

increase rate of GDP

1.90

10%

1.70
1.50

8%

1.30

6%

1.10

4%

0.90
2%

0.70

0%

0.50

2008

2007

2006

2005

2004

2003

2002

2001

2000

5

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
 Car and motorbike droving gasoline consumption increase in China


The vehicle , esp. the rapid increasing private cars lead to gasoline
consumption blooming, from 3505x104t in 2000 to 6343 x104t in 2008, with anannual average growth rate of 7.7%.

Gasoline consumption is mainly used for car and motorbike in China, which is98% of all gasoline consumption.
motorbike
14%

other
2%

gasoline
car
84%

6

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
 Aviation kerosene consumption kept a rapid growthKerosene is mainly used in aviation and some other industries. Aviation kerosene
occupies about 95% of all kerosene consumption.



For the increasing of foreign trades and business traveling，aviation industry
developed rapidly. The aviation kerosene consumption increased from 870x104t
in 2000 to 1280x104t in 2008, with an average annual increase rate of 4.9%.
industryetc, 5%aviation
consumption,
95%

7

IEEJ: November 2009

Current situation and characteristic analysis of
China refined oil product market
 Automobile and agriculture are main driving power for diesel
consumption

Diesel oil consumption increased from 6774×104t in 2000 to 13886×104t in
2008, with an average annual increase rate of 9.4%.

In 2008, Diesel used by automobile industry reached 53%. The portion ofagriculture declined. The others, e.g. construction and mining etc, were similar,
since more nature gas was used.
fish
culture4%

electricity
industry and mining
3% construction
6%
4%

ship transport
train 4%commerce2%
diesel car
53%transport
5%

agriculture
19%

8

IEEJ: November 2009

Contents
Ⅰ、Current situation and characteristic analysis of China refined oil productmarket
Ⅱ、Financial crisis influence to refined oil product market in China

Ⅲ、 The forecast of refined oil product supply and demand in China
Ⅳ、 China influence to refined oil product market in northeast Asia

9

IEEJ: November 2009

Financial crisis influence to refined oil product market in China
 Influenced by financial crisis, China economy entering an adjustment stage


Economic development slowed down obviously in the third and forth quarter of 2008, thegrowth rate gradually declining to 9% and 6.8% respectively. Export also began to decline
in Nov. 2008 compared to that in the same period of last year. Exterior demand decreasing
was the main reason for China economy entering into adjustment stage.



Under both stimulus of increasing fixed assets investment and lax stance fiscal policy,
China domestic economy revive again. However private investment and foreign tradearen’t followed at once. The economy prospect in near future is still not very clear.
14.0%
11.6% 11.9%

12.0%
10.0% 10.1%
10.0%
8.0%

9.1%
8.3%

10.4%

10.6%

10.1%
9.0%
6.8%

7.1%
6.1%

6.0%
4.0%
2.0%
0.0%

10

IEEJ: November 2009

Financial crisis influence to refined oil product market in China
The market of diesel declining, kerosene warming up, gasoline steady increasing
in China

As production of many export-oriented companies being stopped or reduced,
the diesel oil consumption declined substantially in the business like mining
and power generation. Transportation activities ( esp. port & road) shrank a lot.
Domestic diesel oil consumption had been in negative growth in 3 seasons.



However, for sustainable citizen consuming capacity and ongoing active
commercial and traveling activities, kerosene consumption warmed up fast after
gloomy days.

11

IEEJ: November 2009

Financial crisis influence to refined oil product market in China

Under the government favorable policy for purchasing small car, no morethan1.6L, growth rate of car sale reached 18% in first half of 2009, driving thegasoline consumption increase slightly.

40%
gasoline increase ratekerosene increase rate30%
diesel oil increase rate

20%
10%
0%

2009Q2

2009Q1

2008Q4

2008Q3

2008Q2

2008Q1

‐10%
‐20%
‐30%
‐40%

12

IEEJ: November 2009

Financial crisis influence to refined oil product market in China
 Financial crisis encourages refined oil product export

Since the forth quarter of 2008, China refined oil product export increased obviously,
influenced by domestic consumption declining. Export of gasoline and diesel oil infirst half of 2009 increased several times, compared to that in the same period of last
year.
140
120

10 4 tgasoline export

diesel export

100
80
60
40
20
0
2007Q3 2007Q4 2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2

13

IEEJ: November 2009

Financial crisis influence to refined oil product market in China
 Influenced by financial crisis, the consumption ratio of diesel to gasoline
fell to historic low.
In recent years, the consumption ratio of diesel to gasoline increased from
1.93:1 in 2000 to a peak 2.22:1 in 2007. Financial crisis lowered the ratio to
2.18:1 in 2008, and the lowest level appeared in 01/2009 , with a ratio of 1.4:1 .
3.00

gasoline consumption

ratio

wt

1400

diesel consumption
consumption ratio

2.50

1200
1000

2.00

800
1.50
600
1.00

400

Jun-09

May-09Apr-09Mar-09Feb-09

Jan-09Dec-08Nov-080
Oct-080.00
Sep-08200

Aug-080.50

Jul-08

14

IEEJ: November 2009

Financial crisis influence to refined oil product market in China
 Compared with gasoline, China diesel oil consumption may be gloomy
for long, short term rebounding is also possible

Financial crisis will influence refined oil product consumption structure ,increasing gasoline consumption steadily while decreasing diesel oil
consumption continuously, leading to the ratio of diesel to gasoline going down
in a future.

In the first half of 2009, government paid more attentions on the infrastructuresand key projects. The diesel-gasoline ratio rebounded obviously, however weshould get a closer look on how long will the effect last.

15

IEEJ: November 2009

Contents
Ⅰ、Current situation and characteristic analysis of China refined oil productmarket
Ⅱ、Financial crisis influence to refined oil product market in China
Ⅲ、 The forecast of refined oil product supply and demand in China
Ⅳ、 China influence to refined oil product market in northeast Asia

16

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Sustainable Economic Growth in Future China
Financial crisis has exerted negative effects on China economy in recent two
years, but industrialization hasn’t finished in China. Urbanization is at a low
level, and potential development space is still very large. China economy willkeep sustainable growth.



According to Chinese government forecast, GDP will still keep an averageannual increase rate of about 8% from 2009 to 2015, in which industry
proportion will rise from 42.9% in 2008 to 44% in 2015.

17

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 China Car industry developing better than expected Car sales reached 9.42 million in 2008 in China. Average annual increase rate was 16.8%
during the past 5 years. China became one of main car consumers in the world. Car
reserving amount reached 57 million in the end of 2008, which was 2.4 times of that in2003.
 At the beginning of “eleventh five years”，China set a target of “the 10% annual growthrate of car industry; demand rising up to 8.5 million, about 40 cars/thousand persons in2010”. The target was achieved 3 years in advance.
The car sales and reserving amount change in recent years
2003

2004

2005

2006

2007

2008

Annual increase rate

Car sales amount（ten thousand）

433

508

580

718

878

942

16.8%

Car reserving amount（million）

24

29

34

41

49

57

19.0%

19

22

26

31

37

43

18.3%

reserve amount per
thousand persons

18

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 More favorable policy issued during financial crisis Financial crisis caused car market depression in a short time in late of 2008 and early of 2009
in China. In several months, car selling amounts grew negatively compared to the same periodof last year.
 In 2009, more favorable policies for car market are issued, such as halving car purchasing tax,
selling vehicles in villages and allowance for old cars disposal. The potential car purchasing
demand was induced by the polices and car sales bloom explosively in several months,
reaching the highest point.
140

break out

10 4

120

downturn

100
80
60
40
20
0

Jul‐09

May‐09Mar‐09Jan‐09Nov‐08

Sep‐08Jul‐08May‐08Mar‐08Jan‐08

Nov‐07

Sep‐07

Jul‐07

May‐07

Mar‐07

Jan‐07

19

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Car sales will keep sustainable growth in ChinaFor car reserving amount per thousand persons of the major car consuming
countries in 2006, America reached 815, the highest level of the world, while China
just reached 31, existing a big gap compared to the worldwide average amount 139.
It implies a large development potential in future China.

900
800

amountCar reserving amount for a thousand persons formain states over the world in 2006

700
600
500
400
300
200
100
0

20

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Car sales will drive the car reserving amount keep increasingGDP per Capita & population are two main factors considered in future car reserving
amount estimation. In general, car reserving amount per capita develops in S-shape,
growth speeding up gradually at first, growth slowing down after reaching the top, andthe amount reaching a saturation finally.



It is forecasted by China authority that car reserving amount will reach a saturation in
2050, and the saturation number will be about 200 per thousand person.



According to a comprehensive estimation, car reserving amount will reach 118 million in2015 in China.

21

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Gasoline demand of saloon car gradually going upChina urbanization process will go on, income per capita increases steadily, and saloon car
will strive for small and low oil consumption. The car demanding of residents will not bechange.
Gasoline powered saloon car will gradually enter into family, which will be the main power inincreasing car sales.
Based on data reference, such as urbanization rate and income per capita，it is estimatedthat average annual increasing rate would be 12% from 2010 to 2015. Sales amount in 2015 isestimated at 18 million. Car reserving amount will increase from 42.3 million in 2008 to 92
million in 2015.
Forecast of gasoline car sales in 2010 and 2015（104）

Year

2008

2010

2015

Gasoline car

735

1020

1800

514

770

1400

70%

75%

78%

Among above：
saloon carsaloon car
percentage

22

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Gasoline demand will keep 5% average annual increase from 2010 to 2015.
For enforcing national energy control policy and implementing petrol taxes, the saloon
car sales will be about 78% of the total gasoline car sales while the reserving percentage will
be 70% of the total , in 2015.
According to automobile experts and the economic fuel-burning standard (for mini vanand saloon car) ,it is forecasted that fuel consumption for a car of every 100 km will reduce
15% in 2012, and 20% in 2015 compared to that in 2008.
 Based on the stated above, it is forecasted that gasoline demand will reach about 73
million tons in 2010 and 93.5 million tons in 2015.

23

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Increasing demand of light and heavy diesel vehicle will drive reserving amountof diesel vehicle continuously go upIndustrialization process will drive logistics and transportation in prosperity. Trucks of
China are obviously developing towards heavy and light type, and passenger vehicles
are developing towards large and middle type, travel passenger type and public traffic
type. The tendency is gradually increasing diesel oil consumption by passenger
vehicles and trucks.



It is forecasted that sales of diesel vehicles will grow at an annual average rate of 9%
between 2010 and 2015, reaching 440x104 in 2015.
the reserve amount forecast of various diesel oil powered cars
3000

10 4
saloon

2500

mini
2000

heavy
medium

1500

light
1000
500

24

0
2003

2004

2005

2006

2007

2008

2010

2015

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Diesel oil demand will keep 3.9% average annual growth from 2010 to 2015
 Driven by rapid development of logistics and auto industry , automobile diesel oil demand
will keep a steady increase in 20 years. But its growth is not as steady as gasoline, because
the frequency of using commercial vehicle is mainly influenced by investment andindustrial development level.
Government kept strengthening allowance to farm machines in recent years in China,
mechanization level of agriculture reached 44.2% in 2008, rising 1.7 percent compared to thatin 2007. It is forecasted that oil consumption in agriculture would keep lower-increase
tendency year by year before 2015.
After financial crisis, China economic structure will be changed. Diesel oil consumption will
accelerate to decline in high energy consumption fields, which will restrain the diesel oil
demand increase in a certain degree.
 Considering all above analysis, it is forecasted that average diesel annual increase will be
about 3.9%, and diesel demand will reach 148 million tons in 2010 and 179 million tons in
2015.

25

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Kerosene average annual demand increases 10.7% between 2010-2015
 Financial crisis made a negative effect on aviation kerosene demand, however civil aviation
quickly warmed up again in first half of 2009, and turnover amount increased 3.8% compared tothat in the same period of last year.
Domestic aviation obviously preceded oversea aviation. The total aviation kerosene
consumption increased 7% compared to that in the same period of last year.
30

107t km25

domestic turnover
overseas turnoverdomestic turnover increasing
overseas turnover increasing

30%
20%

20

10%

15

0%

10

‐10%

5

‐20%

0

‐30%
Jan‐09Feb‐09Mar‐09Apr‐09

May‐09Jun‐09Jul‐0926

IEEJ: November 2009

The forecast of refined oil product supply and demand in China

Sustainable economy growth in future China and world economy recovery
will accelerate aviation development in China. Therefore, it is estimated theaverage annual increase rate of the kerosene demand in aviation mightreach 10.7%. It will reach 15 million tons in 2010 and 25 million tons in 2015.

27

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 Refining capacity growing leads to output increasing of refined oil product from2010 to 2015 in China.
 Based on the development plan of petrochemical industry, refining capacity will keep
steady increase before 2015. A number of new refineries will be built, as well as some ofexisting refineries will be expanded.
Although the refinery shall meet the increasing demand of petrochemical feed stock, theproduction ratio of diesel to gasoline won’t decline obviously.
Based on domestic refinery capacity estimation, domestic gasoline output will keepincreasing between 2009 and 2015,and will reach 89.5 million tons in 2015, with an averageannual increasing rate of about 5%, which is basically equal to demand increasing rate.
The output of diesel oil will keep increasing and it will reach 18200×104t in 2015, with anaverage annual increasing rate of about 4.1%, which is 0.2% higher than demand
increasing rate.
Industry structure upgrade will lower down the consumption ratio of diesel to gasoline.
Surplus light-end of diesel fraction will be used for producing aviation kerosene, and theoutput of kerosene will reach 1600 × 104t in 2010 and 2600 ×104t in 2015, between which
the average annual increasing rate will be 10.2%.

28

IEEJ: November 2009

The forecast of refined oil product supply and demand in China
 The balance between production and consumption will be kept between 20102015 and temperate imports and exports will be needed to compensate the balance

refined oil product supply will turn from a little insufficiency presently to basic balance
between 2010 -2015. Different supply- demand balance problems of various refined oil
product types can be solved by adjusting production. Domestic production can basicallymeet increasing demand.

In the economic integration process of northeast Asia, import and export activities, asadjustment methods, will exist in special period and in complementary oil types, keeping astable supply-demand market in northeast Asia.
Forecast of inland refined oil product supply and demand balance(104t)

balancegasolinekerosene

Diesel oil

2008

5

-115

-562

2010

-287

100

87

2015

-400

100

300
29

IEEJ: November 2009

Contents
Ⅰ、Current situation and characteristic analysis of China refined oil productmarket
Ⅱ、Financial crisis influence to refined oil product market in China
Ⅲ、 The forecast of refined oil product supply and demand in China
Ⅳ、 China influence to refined oil product market in northeast Asia

30

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand refined oil product proportion of China is gradually increasing in northeast Asia,
increasing the output of northeast Asia slightly.


Between 2010-2015, some delayed projects will gradually start up again in
China, and the output of refined oil product will increase steadily . China
proportion will grow from 52% in 2008 to 63% in 2015 among the three
countries of northeast Asia.
Between 2010-2015, the total output of refined oil product will increaseslightly at an average annual rate of 2.2% in northeast Asia. Among thetotal, the proportion of Japan will decline from 32% in 2008 to 22% in 2015,
and Korea will still keep a proportion of 15%.
100%
90%
80%
70%
60%
Korea

50%

Japan

40%

China

30%
20%
10%
0%
2008年

2009年

2012年

2015年

*data from CERA

31IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand Development space exists in automobile market of China and Korea,
laying foundation for market growth in northeast Asia.


China is in primary developing stage in Car industry, and it still has great
development potential in future.



Car reserving amount per thousand persons is high in Korea. It reached 328
in 2006, but gap still existed compared to developed countries. It still has
development space in future.



Car reserving amount per thousand persons reached 594 in 2006 in Japan, at
almost saturation level. From Dec. 2008, car reserving amount begun to
decline in Japan.

32

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand Industrialization and aviation development of China will promote refined
oil product demand in northeast Asia.


Chinese industrious proportion in GDP will reach peak between 2012-2015.
The diesel oil demand for non-vehicle usage will keep increasing.
Industrialization had been achieved between 1970-1989 in Korea and between
1970-1975 in Japan. Diesel demand increased slowly at present in Korea andshowed a downtrend in recent years in Japan.

After improving income per capita in China, kerosene demand in aviationindustry will grow rapidly. Although Korean aviation market is relative small,kerosene demand is likely to resume 2% annual increase along with tour
business development. The kerosene demand will still decline in Japan. There
will be a long way to go to resume, since its export-oriented economy anddomestic demand coming back slowly.

33

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand China and Korea proportion will increase while Japan proportion will
decrease in refined oil product demand structureJudging from the changing economic structure and industry developing
tendency in the three countries of northeast Asia, it is forecasted thatrefined oil product demand will keep 4%～5% average annual increase in
China and 2%～3% increase in Korea from 2009 to 2015. China and Korea
will occupy about 68% and 9% of the total demand of the three countries
in northeast Asia in 2015.
refined oil product demand in Japan will show an average annual
decrease of 2.6%, and the proportion will reduce to 24% of the three
countries in northeast Asia.
100%
90%
80%
70%
60%
Korea

50%

Japan

40%

China

30%
20%
10%
0%

*data from CERA
2008

2009

2012

2015

34

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand

China has rectified refined oil product pricing policy since financial crisis, opening a window
for import.



In China, adjustment of refined oil product price lagged to international market pricebefore 2009. China imported refined oil product only when domestic supply is not enough,while enterprises show very low interest in import.
Since China implement new price and tax mechanism for refined oil product in early 2009,
relationship between refined oil product prices of import, wholesale, retail were basicallyrationalized, which opened a window for importing refined oil product from northeast
Asia. But domestic resource is abundant at present, therefore import is not much.

gasoline CFR compared to wholesale pricein East China

diesel oil CFR compared to wholesale pricein East China

35

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand Financial crisis substantially reduced the amount of exporting diesel oilfrom Japan and Korea to China but kerosene was not influenced.


China is basically self-satisfied in gasoline for long times, but kerosene anddiesel oil are insufficient.

Financial crisis made little influence on importing kerosene, however greaton importing diesel oil. In first half of 2009, the importing diesel is 105 ×
104t, that is 73% decline compared to the same period of last year.
China’s importing amount of different types of refined oil product in first half of 2009 (104t)

Dategasolinekerosene

diesel oil

First half of 2008

84

319

385

First half of 2009

4

301

105

-95%

-6%

-73%

Compared with the same
period last year（%）

36

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demand

Korea and Japan are countries from which China mainly imports kerosene anddiesel oil . Kerosene import from Korea and Japan was 72% of all import
volume in first half 2009. The import kept the same as that in 2008.
Diesel oil import from Korea and Japan was 34% of all import volume in firsthalf of 2009 , reducing 13% compared to that in 2008.
For periodical economic adjustment, it is forecasted diesel oil import will keep
declining in 1~2 years in China. It’s not easy for northeast Asia countries
exporting diesel oil to China.

kerosene import countries distributing in first half of 2009
other, 83 , 28%

diesel import countries distributing in first half of 2009

Korea, 163 , 54%

Korea, 27 , 25%
other, 69 , 66%

Japan, 56 , 18%

Japan, 9 , 9%37

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—supply and demandThe national standards of refined oil product are gradually upgraded because government
pay more attention to cleaning fossil fuel. China will push standard IV gradually after 2011.
The quality of importing products will be gradually upgraded, too, and importing types will be
expanded continuously. In this case, more developed refineries may have more advantages
on Chinese market.
Quality change of gasoline in China
Coming into effect Date

01/01/2000

06/12/2006

Standard No.
Corresponding effluent standard
Sulfur content，%(m/m),not more thanBenzene content，%(v/v),not more than
Alkene content，%(v/v),not more than

GB17930-1999
EuropeⅠ
0.1
2.5
35

GB17930-2006
China standardⅡ
China standard Ⅲ
0.05
0.015
2.5
1
35
30

Arene content，%(v/v), not more than

40

40

40

China standard Ⅳ
0.005
1
25
60(Alkene+Aroma)

Quality change of diesel oil in China
Coming into effect Date
Standard No.

01/01/2002
GB252-2000

Corresponding effluent standard

EuropeⅠ

Sulfur content,%（m/m),not more thancetane value,not less than0.2
4501/10/2003
GB/T19147-2003
Europe Ⅱ
0.05
49/46/45

China standard Ⅳ

0.005
51/49/47

38

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—reserving
 Reserve plan of refined oil product in China is good for market
stabilization


China had begun to implement oil reserving strategy in 2005, and in2009 government declared that China would start the multi-reserving
plan. The reserve will not be only crude oil, also including others, suchas gasoline and diesel oil.

39

IEEJ: November 2009

China influence to refined oil product market in northeast Asia
—futures market
 Reforming the price mechanism of Chinese refined oil product is good forestablishing futures market, but there is still a long way to goOpening refined oil product market is a necessary condition forestablishing refined oil product futures market.
China is gradually opening the refined oil product market, and there are
six steps as follow.

Before 1998
06/1998～06/2000
06/2000～10/2001
11/2001to 1/2007

State planning management, priced only bygovernment
Agree with international oil price,accompanied with government adjustment
Controllable floating price according tointernational refined oil product market
Development and Reform Commission makes thestandard retail price, floating degree is 8%

02/2007 to 12/2008

Priced according to the cost

Since 2009

Indirectly integrated with the price ofinternational crude oil market
40

IEEJ: November 2009

THANK YOU！

Contact : report@tky.ieej.or.jp

2009-11-6