First Time! Temporary Adjustment of Finished Oil Prices! A Detailed Explanation of the Subsequent Impact

On the afternoon of March 23, the domestic refined oil price adjustment was finalized. The National Development and Reform Commission announced on the 23rd that, based on the current pricing mechanism, starting from 24:00 on March 23, the prices of gasoline and diesel (standard products) should each be increased by 2,205 yuan and 2,120 yuan per ton, respectively. After adjustment, the actual increase is 1,160 yuan and 1,115 yuan.

In recent years, refined oil prices have been adjusted according to the current mechanism. This is the first adjustment since the implementation of the current mechanism in 2013. As a result, this round of domestic refined oil price adjustment is about 0.85 yuan lower per liter than the theoretical increase, significantly below market expectations.

“This adjustment will effectively halve the actual price increase, helping to ease the rising costs for end-users,” said Xu Peng, a refined oil analyst at Jinlianchuang.

According to multiple industry sources, short-term price fluctuations have disturbed market sentiment. Under weak terminal demand and hindered cost transmission, impacts across the industry chain are diverging. Meanwhile, with sharp oil price swings, the rapid electrification of commercial vehicles is quickly transforming the energy landscape in transportation.

First Temporary Price Adjustment in China

Refined oil prices have been adjusted according to the current mechanism. This is the first such adjustment since the mechanism’s implementation in 2013.

Based on the current pricing mechanism, starting from 24:00 on March 23, the prices of gasoline and diesel (standard products) should each be increased by 2,205 yuan and 2,120 yuan per ton, respectively. After adjustment, the actual increases are 1,160 yuan and 1,115 yuan.

The National Development and Reform Commission explained that the reason for the temporary adjustment is that since the last price adjustment on March 9, international crude oil prices have surged sharply due to escalating conflicts involving the US, Israel, and Iran. This move aims to slow the impact of abnormal international oil price increases, reduce downstream user burdens, and ensure stable economic and social development.

Converted to per-liter prices, this adjustment results in approximately a 0.87 yuan increase for gasoline and a 0.95 yuan increase for diesel, compared to no adjustment, which would have been about 0.85 yuan per liter. For private cars, with a 50-60 liter tank, full tank filling can save about 42.5 to 51 yuan; for large trucks with a 400-600 liter tank, savings are approximately 340 to 510 yuan.

Wang Zengye, Chief Economist at China Oil Capital, told Shanghai Securities News that China’s oil price adjustments lag behind international markets, which helps smooth volatility. Additionally, when prices are high, reducing processing margins, delaying price hikes, or providing subsidies to specific industries can buffer downstream impacts.

Since 2026, China has undergone six rounds of maximum retail price adjustments for refined oil. After this adjustment, domestic gasoline and diesel prices have increased by a total of 2,320 yuan/ton and 2,235 yuan/ton respectively since the end of last year.

This round of price adjustment is directly related to high international oil prices. According to the Price Monitoring Center of the National Development and Reform Commission, during this cycle (from 24:00 on March 9 to 24:00 on March 23), international oil prices fluctuated upward, with the average price during the cycle significantly higher than the previous round.

“The direction of the US-Israel conflict is a key factor affecting international oil prices,” said an expert from the Price Monitoring Center of the National Development and Reform Commission in an interview.

Looking ahead, Wang Zengye said that if the US and Iran reach a substantial ceasefire agreement, or if military actions are limited to symbolic deterrence without affecting core oil production facilities, the Strait of Hormuz remains open, OPEC+ plans to resume production increases, geopolitical risk premiums will quickly recede, and international oil prices will stabilize within a balanced range. Conversely, if the situation remains deadlocked with limited airstrikes and retaliations but no blockade of key routes or destruction of major refineries, prices will likely remain high and fluctuate within a high range.

“From a long-term perspective, the global oil supply and demand structure has not fundamentally changed,” said Yang Hanfeng, Vice President of China Operations at Golden Eagle Group, Singapore. He added that if geopolitical conflicts ease and resources and markets balance, international oil prices will eventually return to rational levels. He forecasts that oil prices in 2026 will stay within the $60–80 per barrel range.

Senior researcher Zhong Jian of AiHertz Information & Consulting also believes that the recent rise in international oil prices is mainly driven by “war risk premiums,” reflecting uncertainties caused by geopolitical conflicts and market sentiment. Once tensions ease, this premium is likely to be quickly reversed.

The next price adjustment window is at 24:00 on April 7, 2026. Most third-party agencies expect that domestic refined oil prices will continue to rise.

Xu Peng said that based on current oil prices, the change rate for the next adjustment cycle may be positive, with an estimated increase of about 650 yuan per ton, and the margin of increase could widen further. If the next adjustment still results in a high increase, the government may continue to implement regulation measures according to relevant regulations.

If international oil prices continue to rise sharply, what other policy tools does China have?

Lü Zhichen, Deputy Director of the Price Cost and Certification Center of the National Development and Reform Commission, explained that historically, during the Russia-Ukraine conflict in 2022, international oil prices surged significantly. At that time, China explicitly stated that if international oil prices exceeded $130 per barrel, domestic refined oil prices would not be increased in the short term (no more than two months), and phase subsidies would be provided to refining companies.

How does the industry chain transmit these effects?

After the price adjustment, if oil prices continue to rise, how will upstream and downstream industries be affected?

From the upstream perspective, refineries and refined oil sellers are experiencing mixed fortunes. During the two adjustment windows, wholesale prices of refined oil have surged. According to Longzhong Information, from March 9 to March 23, the price of China’s No. 92 gasoline was 9,395 yuan/ton, up 20.48% month-on-month; No. 0 diesel was 7,774 yuan/ton, up 23.30%.

While rising prices are beneficial, many refineries have reduced operating rates due to raw material shortages. Zhang Zeyu, chief analyst at Zhejiang Merchants Futures, told reporters that recent surveys show most Shandong local refineries have tight raw material inventories, enough only until late April, with some already shut down. Overseas procurement of cheap oil is limited, and domestic crude oil prices remain high.

Downstream, some wholesale distributors report that since March, both procurement costs and retail prices have increased, but profit margins remain manageable.

Will price increases impact consumption?

Heshun Petroleum, a listed company mainly engaged in retail and wholesale refined oil, stated that high oil prices may impact consumer demand, but rigid demand remains stable, with only minor fluctuations.

“The company’s gross profit remains relatively stable,” said a business manager at a domestic North China-based refined oil sales firm. The main risk is misjudging market trends, which could lead to high inventory costs or stockouts. The company maintains moderate inventories, with resources sufficient for about a week of sales. Daily sales fluctuate greatly, and the company employs rolling procurement strategies to hedge against sharp price swings.

Industry experts believe that fundamentally, China’s refined oil market remains oversupplied with ample inventories. The industry’s long-term core logic is that, in recent years, the penetration of new energy vehicles has peaked domestic refined oil demand.

Will logistics costs rise?

Following the price increase, the logistics industry is most directly affected. According to Zhuochuang Information, a 10% rise in oil prices typically reduces the gross profit margin of small and medium logistics companies and individual drivers by 3–5 percentage points. For companies mainly engaged in heavy freight and trunk transportation, costs will increase significantly. Zhao Xiaomin, a logistics expert, told Shanghai Securities News that rising oil prices will also push up prices of basic chemical products, and costs for packaging, plastic bags, and other materials used in express delivery will also increase.

Most express companies currently use diesel trucks for intercity trunk routes and gasoline or new energy vehicles for urban delivery. Yuan Tong Express explained that its main fleet is diesel-powered, so rising fuel prices do exert some cost pressure on trunk routes. According to Zhongtong Express’s 2025 financial report, trunk transportation costs account for about 28.5% of revenue, and the company aims to reduce costs through scale operations, optimized loading, and route planning.

Xu Yong, Vice President of the Express Logistics Branch of the China Transportation Association, said that currently, the fuel cost per parcel is about 0.05 yuan, which is still manageable within the industry. However, if fuel costs break through 0.1 yuan per parcel and stay at that level for over ten months, companies will find it difficult to bear alone, and costs will inevitably be passed on. Some courier companies outsourcing transportation will negotiate with external carriers to share the additional costs caused by rising fuel prices.

So far, freight rates have not increased significantly with the rise in refined oil prices. Zhao Xiaomin believes that, given the current “anti-involution” policy trend in the courier industry, prices may modestly rise this year, with e-commerce parcels leading the adjustment. In the short term, general parcel shipping costs are unlikely to fluctuate noticeably.

How can courier companies respond besides passive acceptance? Zhao Xiaomin suggests that in the short term, companies can delay cost pressures by adjusting routing systems and strengthening driver fuel-saving training. In the medium to long term, increasing digitalization and replacing vehicles with new energy models are advisable. Currently, some courier companies are accelerating the electrification of urban delivery vehicles. Zhao expects that this year, the proportion of new energy vehicles in the courier industry could exceed 40%.

“Electric vehicles are entering the fast lane?”

With large fluctuations in oil prices, can new energy commercial vehicles become substitutes for traditional fuel vehicles?

“Our company’s pure electric tractors, dump trucks, new energy van trucks, and other models are popular with customers. They are currently active in short-distance transportation, construction, and urban logistics in Guangdong, Shandong, Shanghai, Yunnan, Shanxi, and other regions,” an executive from China National Heavy Duty Truck Group told reporters.

Amid the wave of electrification, China National Heavy Duty Truck Group exemplifies the current high prosperity of the new energy commercial vehicle industry. According to the China Association of Automobile Manufacturers, by 2025, new energy commercial vehicles will have become a key driver of structural growth in the automotive sector, with annual sales reaching 871,000 units, a 63.7% year-on-year increase, and market penetration rising to 26.9%, marking a leap from 2024.

Entering 2026, the new energy commercial vehicle sector continues its growth trend. According to the latest compulsory traffic insurance data, in January–February 2026, 78,000 new energy commercial vehicles were insured, a 3% increase. Liu Xuguang, Vice General Manager of Foton Motor, estimates that the overall sales of commercial vehicles in China will reach 4.25 million units in 2026, with new energy vehicles surpassing 35% penetration—meaning at least 3 out of every 10 commercial vehicles sold will be new energy models.

As penetration rates increase, major listed companies are also raising their 2026 targets for new energy commercial vehicle sales. It is learned that FAW Jiefang plans to sell 44,000 new energy commercial vehicles in 2025 and has set a target of 75,000 units for 2026, an increase of over 70%.

The significant rise in new energy penetration in commercial vehicles reflects their energy cost advantages over traditional fuel vehicles. For example, a heavy-duty diesel truck traveling about 150,000 km annually consumes roughly 38 liters per 100 km. At 7.5 yuan per liter, annual fuel costs are about 427,500 yuan. In contrast, a pure electric heavy-duty truck consumes about 120 kWh per 100 km, and at a low electricity price of 0.6 yuan per kWh, annual electricity costs are approximately 108,000 yuan, saving about 319,500 yuan annually. If oil prices continue to rise, this cost gap will widen further.

Despite higher vehicle purchase and insurance costs, the significant reduction in energy consumption costs makes new energy commercial vehicles increasingly advantageous, especially amid recent oil price increases.

“The energy substitution effect brought by new energy commercial vehicles is becoming more evident,” said Cui Dongshu, Secretary General of the Passenger Car Branch of the China Automobile Circulation Association. He explained that the widespread adoption of electric heavy-duty trucks greatly reduces rigid demand for diesel, easing supply pressures in the domestic diesel market and reducing China’s oil import consumption in the commercial vehicle sector, which is an important path to lowering reliance on foreign oil and optimizing energy consumption.

Furthermore, electric commercial vehicles, especially heavy-duty trucks, help domestic logistics and transportation industries escape the influence of international oil price fluctuations. Relying on relatively stable domestic electricity prices, particularly during off-peak hours, they enable overall cost control and risk mitigation, enhancing the industry’s resilience. From an energy consumption perspective, new energy commercial vehicles are accelerating China’s transportation sector’s shift from “oil-dominant with electric auxiliary” to “electric-dominant with oil auxiliary,” representing a key breakthrough in reducing over-reliance on traditional fuels and optimizing energy structure.

Veteran automotive analyst Gu Yatao told reporters that in the long term, due to factors like electricity prices and policy incentives, China’s cost advantage in transitioning to new energy commercial vehicles is likely to surpass that of other major markets worldwide. The competitiveness of Chinese new energy commercial vehicle manufacturers is expected to continue growing.

Author: Lin Yulian, Yu Xiangming, Yu Liyan, Feng Xinyi