Gasoline Market Dynamics Report

I. Price Trends
1. International Crude Oil Prices:
- International crude oil prices have exhibited volatility recently. On May 21, international crude oil futures declined, with the U.S. WTI crude oil futures contract for July settling at USD 96.35 per barrel.
- Previously, international crude oil prices surged significantly amid escalating geopolitical tensions in South America and the Middle East, pushing the price benchmark progressively higher.

2. Domestic Gasoline Prices:
- On May 21, China’s National Development and Reform Commission (NDRC) announced an upward adjustment to domestic refined oil prices, raising gasoline and diesel prices by RMB 75 and RMB 70 per ton, respectively, in Guangdong Province.
- According to data from JinTou.com, as of May 26, national retail prices for 92-octane gasoline varied regionally: prices were relatively uniform across first-tier cities—Beijing at RMB 8.72 per liter, Shanghai at RMB 8.67 per liter, and Guangdong at RMB 8.73 per liter; special administrative regions posted notably higher prices—Hainan Province at RMB 9.83 per liter (including a fuel surcharge), and Tibet Autonomous Region at RMB 9.58 per liter (reflecting high transportation costs and challenging natural conditions); prices across other provinces generally ranged between RMB 8.50 and RMB 8.90 per liter.

3. Wholesale Prices:
- In early May, the wholesale price for 95-octane, China VI standard gasoline stood at RMB 9,111.7 per ton, representing a 2.2% month-on-month decline.
- Throughout April, gasoline wholesale prices fluctuated downward—for instance, according to Shengyishe Commodity Network, the benchmark gasoline price was RMB 8,243.14 per ton on April 20, down from RMB 8,676.29 per ton on April 16.

II. Supply-Demand Dynamics
1. Supply Side:
- Domestic refineries maintained stable production, and refined oil inventories remained at reasonable levels. The operating load of major state-owned refineries edged up slightly month-on-month, whereas the average operating load of independent refineries in Shandong Province declined.
- In May, several refineries entered scheduled maintenance periods; nonetheless, overall supply remained sufficient to meet market demand.

2. Demand Side:
- Gasoline demand experienced phased fluctuations due to the substitution effect of new-energy vehicles (NEVs) and persistently high fuel prices. Holiday-related travel demand during the Spring Festival temporarily boosted gasoline consumption, but demand subsequently softened amid accelerating NEV adoption and elevated pump prices.
- Diesel demand weakened more markedly, weighed down by sluggish industrial and logistics activity.

III. Key Influencing Factors
1. Geopolitical Risks:
- Escalating geopolitical conflicts in South America and the Middle East have undermined global crude oil supply stability, contributing to price volatility.

2. Cost Pass-Through:
- Rising international crude oil prices directly triggered upward adjustments to China’s domestic refined oil retail price caps, transmitting cost pressures from the upstream to the domestic gasoline market.

3. New-Energy Vehicle Substitution Effect:
- The accelerating substitution of conventional gasoline vehicles by NEVs is exerting growing downward pressure on gasoline demand, reshaping the gasoline market’s supply-demand equilibrium.

IV. Analysis and Outlook
1. Short-Term Outlook:
- Amid ongoing international crude oil price volatility, refinery maintenance activities, and evolving supply-demand dynamics, domestic gasoline retail prices are expected to fluctuate within a narrow range.
- Regarding wholesale prices, short-term gasoline pricing is anticipated to remain volatile, influenced by both cost-side pressures and supply-demand fundamentals.

2. Long-Term Trend:
- As geopolitical risks ease and global crude oil supply-demand conditions normalize toward greater balance, international crude oil prices are expected to gradually revert to rational levels—thereby exerting downward pressure on domestic gasoline prices.
- The NEV substitution effect will continue intensifying over the long term, imposing sustained structural pressure on gasoline demand and shaping the long-term trajectory of the gasoline market.

V. Forecasts
1. Price Forecast:
- Over the next month, domestic 92-octane gasoline retail prices are projected to fluctuate within the RMB 8.50–9.00 per liter range, with regional variations persisting.
- Wholesale prices are forecast to oscillate within the RMB 8,000–8,500 per ton range.

2. Market Trend:
- As international crude oil prices gradually decline and the NEV substitution effect deepens, the domestic gasoline market faces persistent long-term downward pressure.
- Refineries and distributors should closely monitor market developments and policy updates, and proactively adjust production and sales strategies to navigate emerging challenges.