Lubricating oil "price rise tide" : many dealers to stock up, "big-name goods" become the first choice

November 02, 2023

Lubricating oil "price rise tide" : many dealers to stock up, "big-name goods" become the first choice

Recently, with the landing of the latest consumption tax collection caliber, the lubricant industry has set off a round of "price increase tide" nationwide. With a keen sense of smell, auto repair factories, fuel stations, 4S stores have opened the stock up mode, and the relatively stable price of the big factory brand has become the most favored "first choice explosive" of the hoarders.

It is reported that the price increase of this round of lubricating oil is generally more than 5%, and the highest increase reached 10%. Shell, Mobil, Great Wall, Kunlun and other first-line brands have raised prices at the same time. The industry pointed out that the implementation of the consumption tax policy, rising raw material prices, and changes in international oil prices are all factors that jointly promote this round of price increases.

Consumption tax collection calibre adjustment: 1500 yuan per ton

On June 30, the State Tax Administration of the Ministry of Finance issued the Announcement of the State Tax Administration of the Ministry of Finance on the implementation caliber of the Consumption Tax Policy of some refined oil Products. The announcement announced the latest implementation of the scope of consumption tax on refined oil products. Affected by this, some oil prices in the industry showed a significant increase.

According to the current consumption tax standard, the consumption tax on Base Oil is 1711.52 yuan/ton; With value-added tax (calculated at 17% value-added tax rate), the tax amount is 2002.48 yuan/ton, accounting for nearly 30% of the sales price. The price of industrial white oil is increased by about 300 to 400 yuan/ton.

(Photo from the official website of the Ministry of Finance of the People's Republic of China)

The adjustment of the implementation caliber has focused on cracking down on the invoicing difference that once existed in the market to avoid consumption tax. The huge difference between "issuing lubricating oil invoices, issuing industrial white oil invoices, and not invoicing" has been equalized after adjustment and uniformly incorporated into consumption tax.

Affected by this, once by evading the import tax to reduce the cost of the "brush workshop" they no longer have loopholes to drill, rely on tax avoidance to compete at low prices of the "small maintenance" package is difficult to sustain, the lubricant market returned to the "same tax competition" fair environment. In the case of the same price and different quality, first-line brands have more advantages in cost performance.

International crude oil production cuts: Saudi Arabia, Russia

Saudi Arabia's oil production reduction agreement and Russia's oil export cuts have been extended until the end of 2023, leading to further supply tightening in the international crude oil market. Swiss bank estimates: in the fourth quarter of 2023, the global oil supply will be a big gap. In contrast, U.S. crude oil inventories fell more than expected for two consecutive weeks.

At the same time, the weakening of the dollar index is also driving up the price of international crude oil denominated in dollars. Ubs and Goldman Sachs raised their forecasts for Brent by the end of December to $95 and $93 a barrel, respectively, from $90.

The rise in crude oil prices is also an important bellwether of rising prices throughout the lubricant supply chain.

The reason for "grab the big name" : or hedge, or odd

In recent months, the price of lubricating oil has continuously increased. Among them, there are factors such as base oil, industrial white oil consumption tax, international oil price fluctuations, and the reduction of imported lubricating oil. Affected by the transmission of the industrial chain, the lubricant market will continue to rise in the next period of time, so there are not a few terminal enterprises that "stock up".

In the tide of hoarding goods, most of the "hoarding hands" are more inclined to good after-sales service, stable channels and easy to sell and realize the big-name products. Channel operators generally believe that: "Small brands have large price volatility risks, low market awareness, and it is easy to have risks when stocking up." Relatively, big-name products have high awareness, strong channel protection and easier circulation."

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