China National Chemical Industry Group Co., Ltd. Sourcing in Refined Oil Sales Market

Competition in China's refined oil sales market may be unprecedentedly fierce. On the 19th, our reporter learned from an informed source close to local refinery companies in Shandong Province that the leading chemical industry company in China, China National Chemical Industry Group, is planning to build a nationwide oil base with several companies in Shandong. Product sales companies may enter the refined oil sales market in the future.

“China National Chemical Industry Group has always been interested in entering the downstream segment of refined oil products, which is also one of the purposes for its acquisition of local refinery companies. After several years of operation, China Chemical Industry Group has basically completed the internalization of several acquired refineries. With the integration, the sales system group of each country will be built into a nationwide oil sales company and will be put on the agenda accordingly, said the person familiar with the matter.

The reporter disclosed from the Shandong Provincial Economic and Trade Commission that “The Shandong Provincial Refining and Chemical Industry Adjustment and Rejuvenation Guidance Opinions (Draft for Soliciting Opinions)” was disclosed. By 2008, China National Chemical Industry Group had acquired, reorganized or controlled the entire Jinan Petrochemical Group in Shandong Province. , Jinan Great Wall Refinery, Zhenghe Group, Huaxing Petrochemical, Changyi Petrochemical, Qingdao Anbang Petrochemical and other six refining companies.

According to the above-mentioned personage introduction, the original each place has its own sales system, even after being acquired by China National Chemical Industry Group, the sales business is “going away”, and the current consideration of China Chemical Industry Group is to form a “national” brand name. Oil sales companies participate in market competition with a unified sales system.

"The next step, local refining companies may only retain gas stations in a few places, and most of the sales business will be included in the sales network of China National Chemical Industry Group, and can reach Sichuan, Hunan, Guangdong and other provinces as far as possible." The above sources said .

He also told this reporter that China National Chemical Industry Group will serve this sales company in the future according to the characteristics of different refining methods. For example, some refiners have a strong ability to mainly engage in oil refining business, and some strong logistics companies emphasize the role of logistics and transfer sales.

"Of course, the national oil sales company must go through certain procedures for approval, and it may require special approval from the top of the State Council." The above person said.
In response, the relevant person of China Chemical Industry Group did not respond on the phone yesterday.

It is worth noting that China National Chemical Industry Corporation is the second giant company that wants to seize the market of Chinese refined oil sales in the near future. Just last Monday, Shell announced that it will build about 100 joint venture gas stations with Yanchang Petroleum Group in the future.

“The emergence of this phenomenon and the rationalization of the product oil price formation mechanism have ensured the stability of downstream profits of refined oil products.” An industry expert told this reporter.

The "Petroleum Prices Management Measures (Trial)" promulgated by the National Development and Reform Commission in May this year shows that domestic refined oil prices are based on crude oil prices in the international market, plus domestic average processing costs, taxes, reasonable circulation expenses, and appropriate profits.

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