#CNPC experts call for reform of China's refined oil pricing scheme
16:30, Thursday, 21 May, 2020
Researchers at an energy think tank affiliated with China National Petroleum Corp (CNPC) are calling for the reform of China’s fuel pricing system by removing the floor price or allowing state companies to spend the money to boost oil output.
China adjusts its retail fuel prices to reflect Brent crude oil prices between a band of $40 to $130 a barrel. When Brent prices are below $40 - they are currently at $36.52 - retail gasoline and diesel prices will not be cut lower by the state planner, even if oil prices drop further. Under the current scheme, Chinese oil refiners are required to pay the profit between the fuel and crude to a central government fund. However, researchers at CNPC’s Economic and Technology Research Institute (ETRI) propose the government remove the retail fuel price floor or redirect the money from the fund toward oil exploration.