Study On China’s Refined Oil Pricing Machanism Reform

With the development and marketization of our country’s economy, thedrawbacks of non-market refined oil pricing mechanism become increasinglyprominent, thus, how to improve and reform the current refined oil pricing mechanismbecomes the focus of public attention.This article first introduces the background and meaning of reforming China’srefined oil pricing mechanism, and then discusses and analyzes the current literaturesfrom domestic and abroad, and layout the framework of the whole article. The secondpart will review the world oil price trend and the China’s oil market working situationin the recent years, it points out that due to the imperfection of our country’s refinedoil pricing mechanism, inefficient economic symptoms, such as oil shortage, pricelags and oil price upside down tend to appear in the markets. Therefore, it’s necessaryto further improve and reform the country’s refined oil pricing mechanism. The thirdpart will look back at the China’s refined oil pricing mechanism reform history frommid-1950s to2010s, and divide the history into three stages: single price stage, doubleprice stage and internationalization stage. The forth part, based on the empirical datafrom United States’ and China’s oil markets, will examine the quantitative relationshipbetween refined oil prices and world crude oil prices. It testifies that in a full marketeconomy, there exit a long-term cointegration relationship and bidirectional Grangercasual relationship between refined oil prices and world crude oil prices, but there isno cointegration relationship and just a single-directional Granger casual relationshipin a non-market economy. To some extent, this explains, under the current refined oilpricing mechanism, why the domestic oil market have little influence on theinternational oil market and Why China have little pricing power in the world oilpricing market. The fifth part, based on the previous researches, will provideproposals on how to further improve and reform the national refined oil pricingmechanism.