Researchers at CNPC’s Economic and Technology Research Institute (ETRI), said China’s oil imports would increase by 2% in 2020 amid lower prices. Crude oil demand in the country is expected to rise by 1%-2%. Meanwhile, the coronavirus pandemic is expected to cause demand for refined oil products to decline by about 5%, marking the first demand drop since 2000. ETRI noted that the health crisis caused a 23% plunge in demand for refined oil products in Q1.
ETRI researchers also proposed a reform in China’s refined oil pricing scheme. Under the existing scheme, refiners are obliged to pay the profit between the fuel and crude to a fund owned by the central government. ETRI urges the government to revoke the retail fuel price floor or allow oil companies to redirect the fund to invest in oil explorations to boost crude oil production.
