The huge loss of "two barrels of oil" should accelerate the elimination of monopoly
China News Weekly reporter / Yan Xiaofeng
Published in 2020.5.11 total issue 946 "China News Weekly"
The current epidemic of the new crown is raging all over the world. In addition, Saudi Arabia and Russia have launched a price war, and international oil prices have experienced a cliff-like plunge in the first quarter. However, PetroChina and Sinopec recently released a quarterly financial report showing that "two barrels of oil" lost 36 billion yuan in a single quarter!
Industry analysts said that the main reason for the huge loss of "two barrels of oil" was the purchase of high-priced crude oil at the end of last year and early this year, and the cycle from crude oil procurement to processing into products was 2 to 3 months. So, can we enjoy low oil prices after this cycle? Not exactly. Because the price of oil is expensive in "oil barrels". According to the relevant provisions of the "Petroleum Price Management Measures" and other relevant regulations, when the average price of international crude oil is less than US $ 40 per barrel, the domestic refined oil price will no longer be adjusted, and the unadjusted amount will be fully included in the oil price control risk reserve, and the full amount will be turned over to the central treasury Instead of leaving it directly to the enterprise as income. In addition, China implemented reforms in refined oil prices and taxes and fees in 2009, including road maintenance fees and gasoline prices, and increased consumption taxes. All taxes and fees accounted for as much as 48% of oil prices. This caused the international oil price to slash, the domestic oil price did not halve, the oil price plummeted and it was not cheap for car owners to refuel.
But even if the relevant national policies cannot be reformed in the short term, it is not difficult to see that the monopoly of several major domestic oil companies and insufficient competition are another reason why oil prices cannot fall. That is to say, even if it is the international crude oil imported at $ 0, due to the high transportation cost, refining cost, sales cost and gray income, the high oil price will still be included in the owner's oil price.
Regarding the huge losses, PetroChina said that there are three main reasons: one is the impact of the New Crown epidemic, the second is the sharp drop in international crude oil prices, and the third is the periodic adjustment of natural gas price policies. At a deep level, the "two barrels of oil" operating mechanism loses its flexibility due to long-term monopoly. Profit growth mainly comes from price increases, not from proper operation, internal potential tapping and high-quality services. CNPC also said that enterprises have once again reached the critical juncture of survival and development, and must rely on scientific and technological innovation to manage innovation, in order to traverse the current "dark moment."
In the past 20 years since China's accession to the WTO, although many scholars have been criticizing the monopoly status of state-owned oil companies, there are always interests that hinder market reform in the petrochemical field. How to solve the problem of "expensive oil barrels", in addition to gradually reducing relevant taxes and fees, so that oil prices are truly in line with international standards, liberalization of crude oil import rights, and the introduction of more players in the smelting, exploration, retail and other links, we can establish a real The rules of the game in line with the principles of the market economy.
As early as 2011, the National Development and Reform Commission had talked to PetroChina, Sinopec and other relevant units to urgently coordinate the supply of agricultural diesel in parts of the middle and lower reaches of the Yangtze River. Why is there an "oil shortage" phenomenon? The main reason is that the refined oil products are not released, foreign companies and private companies cannot enter, and the market is completely subject to the monopoly mechanism of state-owned oil companies. Although there are more and more foreign and private companies entering the wholesale and business sectors, it is still fundamentally difficult to break the inherent pattern. Most private enterprises have been living in the cracks of monopoly for a long time, and they have not been able to obtain sufficient oil sources. However, monopoly state-owned enterprises are still enjoying financial subsidies while fighting for money.
According to Hayek, the Nobel Prize winner in economics, monopoly can be divided into "monopoly based on drawing land" and "monopoly based on high efficiency". Although international oil companies also have "monopoly based on high efficiency rates", as long as there is market opening, it will not last. We want to break the "monopoly of painting the ground", because they damage the welfare of the people and lower the public image of the government, and only the individual interests of individual interest groups are exchanged. And these cannot be solved through talks, but can only rely on hard-fought reforms.
It's time, the huge loss of "two barrels of oil" should speed up the step of breaking the monopoly. Otherwise, even if there is an international "negative oil price", people will still not be able to enjoy the dividends caused by falling oil prices, and Chinese oil companies will not be able to go global and compete with international giants.
"China News Weekly" No.16, 2020
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