Countdown to the ban on traditional fuel vehicles: Oil companies such as the Big Three are under the greatest pressure

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The last edit to this post was made by liuquan1100 on 2017-10-6 at 13:50. The countdown to a ban on traditional fuel vehicles is underway, with oil companies such as the Big Three under the greatest pressure. Throughout September, the issue of banning fuel vehicles remained at the center of public attention. 　　At the beginning of September, the vice minister of the Ministry of Industry and Information Technology said that some countries have already set timelines for stopping the production and sale of conventional fuel vehicles; the ministry has also begun relevant research and will work with relevant departments to establish a timeline for China as well. 　　Subsequently, discussions on banning the sale of fuel-powered vehicles continued without pause. The ban on selling fuel-powered vehicles affects not only car manufacturers but also has a significant impact on oil companies. 　　Recently, Liu Weidong, member of the Party Committee and deputy general manager of Dongfeng Motor Company, said at the Dongfeng Motor Technology Innovation Achievements Exhibition that the sectors under the greatest pressure due to the ban on fuel-powered vehicles are not the automotive industry itself, but rather chemical industries such as CNPC and Sinopec, as well as fiscal and tax authorities. This is because these sectors are involved in a large number of jobs, and they also generate significant revenue from fuel taxes and other taxes. 　　“A complete elimination of gasoline-powered vehicles would have a disruptive impact on the domestic refining and fuel sales industries. ”Han Jingyuan, an analyst at Jinxianchuang for refined oil products, told reporters that various integrated refining and chemical projects, which brought in nearly 200 million units of production capacity by the end of the 13th Five-Year Plan period, had a negative impact; as a result, oil production is becoming increasingly lightweight, and environmental protection will be an essential requirement going forward. Moreover, the downward extension of the refining industry chain is also an inevitable trend. 　　It is worth noting that, thanks to policy support, new energy passenger vehicles are gradually entering a phase of sustainable growth. 　　At present, our country has become the world’s largest market for the production and sales of new energy vehicles. In 2016, the production and sales of new energy vehicles in China exceeded 500,000 units, with a total of over 1 million units deployed, accounting for 50% of the global total. 　　From January to July 2017, domestic car sales in China increased by only 4.1% on a year-on-year basis, but the growth rate of new energy vehicle sales remained above 20%. 　　It is also understood that the promotion and use of new energy vehicles can replace 1 million to 1.5 million tons per year of gasoline consumption. 　　Data shows that from January to July 2017, the apparent consumption of gasoline was 70.28 million tons, an increase of 1.07% on a year-on-year basis. However, from 2011 to 2016, the average annual growth rate of apparent gasoline consumption was around 9.95%. The current growth rate is far below the average level of the previous six years. 　　This clearly shows that, under the impact of new energy vehicles, gasoline consumption has begun to decline significantly. 　　“Currently, new energy vehicles account for approximately 8% of the substitution for gasoline each year. If **policies continue to provide strong support for new energy vehicles, their impact on the gasoline market will inevitably continue to grow. ”Han Jingyuan also said that the regions where electric vehicles are developing rapidly, including the Beijing-Tianjin-Hebei area, the Yangtze River Delta, and the Pearl River Delta, are precisely the core areas for oil refining and the consumption of refined petroleum products (these regions account for 70% of the country’s total oil refining capacity and 50% of its gasoline and diesel consumption). The promotion of electric vehicles will gradually influence the layout of oil refining and refined petroleum product sales, as well as the flow of such products. 　　She also pointed out that in the sector of gas stations, which is the largest consumer of gasoline, the development of electric vehicles is bound to impact the traditional services provided by these stations. It is necessary to plan in advance for services related to electric vehicles, making use of existing gas stations to offer charging and other related services. Traditional oil product retailers need to adapt their current business operations and business models to these changes; while improving the quality of oil products, they must also be vigilant regarding the potential surplus in gasoline supply resulting from the development of electric vehicles. 　　At the same time, Hu Huichun, an analyst at Zhuochuang Information, told a reporter from the Securities Daily that in fact, CNPC and Sinopec are also actively undergoing transformation, and charging stations will be installed at their gas stations in the future. 　　Also with the aim of improving the environment, compared to the uncertainty associated with a ban on gasoline-powered vehicles, the widespread adoption of ethanol-blended gasoline is now within reach. 　　On September 13, various departments including the National Development and Reform Commission and the Energy Administration jointly issued the \"Implementation Plan for Expanding the Production of Biofuel Ethanol and Promoting the Use of Ethanol-based Gasoline in Vehicles\", which calls for the promotion of such gasoline nationwide, with full coverage to be achieved by 2020. 　　As of 2016, the national gasoline consumption was 119 million tons, while the demand for ethanol remained around 2 million tons; once full coverage is achieved, the market demand for ethanol will increase to 12 million tons. 　　Han Jingyuan said that compared to high-cleanliness gasoline, ethanol gasoline is made up of 90% high-cleanliness gasoline and 10% ethanol; if ethanol gasoline is promoted extensively and achieves widespread use, demand for ethanol will experience explosive growth. 　　The promotion of ethanol-blended gasoline is beneficial for the three major oil companies. 　　Hu Huichun pointed out that ethanol gasoline is currently being promoted in 11 provinces and cities; the gas stations and distribution outlets affiliated with CNPC and Sinopec offer ethanol gasoline, but those operated by private companies or other traders do not. If it covers the entire country, it will be beneficial for CNPC and Sinopec.