Zhonghao Auto Information Network (http://www.73news.cn/) received a notice from the National Development and Reform Commission (NDRC) at 16:00 stating that, starting from midnight on July 29th, the prices of gasoline and diesel will be reduced by 220 yuan per ton, which translates to a decrease of 0.16 yuan per liter for gasoline and 0.19 yuan per liter for diesel.
This is the first reduction in domestic refined oil prices after three consecutive increases earlier this year. The main reason for this reduction is the continuous decline in international oil prices. Yesterday, the international oil price fell by 4%, meeting the condition for reducing the refined oil price. The NDRC's decision to lower the oil price this time also aligns with the previously high public opinion. On the other hand, some experts, who are rumored to be supporters of China National Petroleum Corporation (CNPC) and Sinopec, have stated that the oil price was not adjusted enough initially and that the domestic oil price is still lower than the international oil price. Many people have expressed doubts about whether the NDRC should adjust or not.
Is the NDRC’s quick response today aimed at addressing the previous public sentiment of "follow-up on price increase but not on decrease" for domestic oil prices, or does it indeed indicate that the domestic oil price has reached the point where it needs to be reduced? This question obviously depends on the future trend of oil prices.
However, this round of price cuts is undoubtedly a boon for the current car market, which is filled with skepticism. But considering the irrational performance of the Chinese car market in the first half of the year, oil prices may not be the decisive factor affecting the car market. In the first half of the year, the domestic car market performed much better than expected, particularly in the luxury car and mid-to-high-end car markets, which showed strong growth. The car market did not follow the expected trend of shifting to the small-displacement car market due to the financial crisis and fuel price issues. Instead, competition was intense across all displacement categories, and each category performed exceptionally well.
Moreover, the continuous price increases since June have not led to a booming small-displacement car market domestically. The actual impact of this oil price reduction on the domestic car market is not yet visible. Or we can say that the unstable domestic oil price has already made it difficult to influence changes in the car market. Changes in oil prices may affect consumers' emotional fluctuations during the consumption process more than actually driving automobile purchases. It is undeniable that the domestic automobile purchase process and the consumption process are relatively independent processes. Fluctuations in fuel prices mainly impact the aftermarket and find it hard to influence automobile purchases.
In other words, the reduction in oil prices only indicates the government's regulatory measures and may not truly affect automobile consumption behind the fuel prices. During the process of automobile consumption, consumers clearly do not expect such passive fuel consumption to continue. Greater transparency in fuel prices might be the key to automobile consumption.