China not to adjust oil product prices as international crude stays
flat: NDRC
Singapore (Platts)--10Apr2013/523 am EDT/923 GMT
China's National Development and Reform Commission will not adjust the
regulated prices of gasoline and diesel in what would have been the
first such exercise following the new pricing mechanism introduced late
last month, the NDRC said Wednesday.
In a statement on its website, the NDRC said international crude prices
have been largely flat since the last price adjustment on March 27, when
it reduced benchmark retail gasoline and diesel prices by Yuan 310
($50)/mt and Yuan 300/mt, respectively.
The NDRC's new refined product pricing mechanism was introduced on March
27 to bring domestic gasoline and gasoil prices more in line with crude
procurement costs. Under it, regulated oil product prices will be
automatically adjusted every 10 working days in line with international
crude price fluctuations, unless the resulting price change is smaller
than Yuan 50/mt, roughly equivalent to $1/barrel.
Under the previous system, domestic oil product prices were reviewed
every 22 working days if a basket of benchmark Cinta, Dubai and Brent
crudes rose or fell by at least 4%.
The NDRC said Wednesday that according to its estimates, the latest
change in refined product prices was less than Yuan 50/mt and so there
would be no price adjustment.
The new mechanism will take into account China's crude import slate,
although the NDRC did not specify which oil grades it would use.
"It is difficult to predict the [degree of] change in gasoline and
gasoil prices since the NDRC has not specified the basket of crude
grades," said an oil products trader in Guangdong province.
The Middle East, Angola and Russia are China's largest suppliers of
crude oil so some traders said they have started including Russian ESPO
and Oman grades in their calculations.
"Usually Chinese refineries refer to US WTI, so I would include this
along with the benchmarks of Brent and Dubai," another products marketer
in Fujian province said.
According to Platts calculations, the rolling 10 day average of Dated
Brent, Russian ESPO and Middle Eastern Dubai and Oman grades had risen
by 0.04% or 4.5 cents/b as of Tuesday compared with March 27.
The inclusion of WTI in the basket would bring the overall change to
plus 0.3% over the same period, according to Platts calculations.
--Song Yen Ling with staff,
yen_ling_song@platts.com
--Edited by E Shailaja Nair,
shailaja_nair@platts.com
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