China's Gasoline and Diesel Prices Surge on Strong Cost Support

Last week, domestic gasoline and diesel prices in China saw a sharp rise, driven by strong cost support from international crude oil prices. The price of 92# gasoline reached 8,495.43 RMB/tonne (up 6.79% over the week), while the price of 0# diesel was 7,464.43 RMB/tonne (up 10.84% ​​over the week). This increase in refined oil prices is largely due to the surge in international crude oil prices.

The primary drivers behind the rise in crude oil prices were the normalization of blockades in the Strait of Hormuz and direct attacks in the Bab el-Mandeb Strait (Red Sea), which increased the risk of supply disruptions. Additionally, while OPEC+ planned to increase production, implementation proved difficult, and the EU tightened sanctions on Russia, effectively raising overall crude oil trading costs.

Domestic demand for gasoline and diesel remained sluggish, with no improvement in consumption levels. The steady rise in penetration rates of new energy vehicles has exerted significant structural pressure on the traditional gasoline market, while high oil prices have curbed driving frequency among some vehicle owners.