The domestic refined oil market has finally seen its first price decrease in 2026, following a prolonged period of six consecutive price hikes. According to an announcement on the National Development and Reform Commission's official website, based on changes in international market oil prices, starting from 24:00 on April 21st, the prices of domestic gasoline and diesel (standard products) have been reduced by 555 yuan and 530 yuan per ton, respectively.
This adjustment marks the opening of a downward window for retail prices of domestic gasoline and diesel, ending the pattern of six consecutive increases witnessed earlier this year. For vehicle owners, this provides a tangible benefit for travel expenses just before the Labor Day holiday. For a typical small car with a 50-liter fuel tank, filling up will now cost approximately 22 yuan less.
However, behind this retail price cut, the international crude oil market is experiencing significant volatility. Influenced by factors such as disruptions to shipping in the Strait of Hormuz, international crude oil prices surged by over 6% just before the price adjustment period. It is noteworthy that the magnitude of this price reduction fell short of initial expectations earlier in the cycle. Furthermore, forecasts from institutions for the next adjustment scheduled for May 8th show divergence. The weak fundamental reality supporting a potential second consecutive decrease is clashing with strong expectations of a possible sharp rebound, creating intense fluctuations in capital and spot markets.
On April 21st, the domestic refined oil retail price officially entered its eighth adjustment window of the year. Based on calculations using the current refined oil pricing mechanism, starting from 24:00 on April 21st, prices for domestic gasoline and diesel (standard products) were lowered by 555 yuan and 530 yuan per ton, respectively. Converted to a per-liter basis, this translates to reductions of 0.41 yuan per liter for 89-octane gasoline, 0.44 yuan per liter for 92-octane gasoline, 0.46 yuan per liter for 95-octane gasoline, and 0.45 yuan per liter for 0-grade diesel.
Following this adjustment, the overall pattern for domestic refined oil price changes this year now stands at six increases, one decrease, and one period where prices remained unchanged.
For end consumers and the logistics transport industry, this brings a long-awaited substantial reduction in fuel costs. Analysis and predictions suggest that for a small car with a 50-liter tank, filling up will cost about 22 yuan less. For the logistics sector, a large truck with a 160-liter tank will see a reduction of approximately 72 yuan per fill-up.
Notably, the final implemented price reduction was somewhat smaller than the strong downward predictions seen at the beginning of the adjustment cycle. Earlier, on the tenth working day of the cycle, one institution had forecasted a decrease of 820 yuan per ton for both gasoline and diesel. The actual reductions set by the National Development and Reform Commission were 555 yuan per ton for gasoline and 530 yuan per ton for diesel. The core reason for this discrepancy lies in the counter-trend rise of international crude oil prices towards the end of the pricing cycle.
Reports indicate that on April 20th, concerns about tight crude oil supply intensified due to shipping disruptions in the Strait of Hormuz, pushing international oil prices to close higher. Specifically, the NYMEX WTI crude oil futures contract for May delivery surged by $5.76 per barrel to close at $89.61 per barrel, a single-day increase of 6.87%. The ICE Brent crude oil futures contract for June delivery also rose significantly by $5.10 per barrel to close at $95.48 per barrel, a gain of 5.64%. Domestically, Shanghai crude oil futures followed the upward trend during the night session, with the main contract SC2605 rising by 7.1 yuan per barrel to close at 613.6 yuan per barrel, an increase of 1.17%.
Geopolitical tensions are undoubtedly a direct driver behind the oil price surge. Analysis suggests that as the window for a US-Iran ceasefire nears its end, escalating tensions in the Strait of Hormuz are providing support for international oil prices.
With the closing of the April 21st adjustment window, market attention has swiftly turned to the next pricing window, scheduled to open at 24:00 on May 8th, 2026. However, faced with the interplay of complex Middle Eastern geopolitics and domestic refined oil fundamentals, predictions from major professional energy research institutions for the next price movement are diverging.
On one hand, based purely on data calculation models and domestic demand fundamentals, a second consecutive decrease appears to have strong inertial support. One analyst pointed out that the recalculated crude oil change rate starts again in negative territory, with an estimated initial decrease of around 140 yuan per ton, indicating a clear downward expectation at the cycle's outset. The valuation model from another institution yields a similar conclusion: on the first working day after the adjustment, the change rate is expected to be around -3.6%, predicting a price decrease for gasoline and diesel of approximately 300 yuan per ton.
Another major real-world factor supporting the bearish outlook is weak domestic demand. An analyst noted that despite the approaching Labor Day holiday, overall market restocking enthusiasm remains limited due to ongoing substitution by new energy sources, making a significant improvement in gasoline demand difficult. For diesel, frequent rainfall in southern regions is limiting the purchasing willingness of traders and downstream end-users, who are focusing more on digesting existing inventories. Combined with mounting sales pressure for sellers as the month draws to a close, and hampered by persistently weak demand, it is expected that the wholesale price trend for domestic gasoline and diesel may continue to decline. Although a new round of retail price cap reductions is anticipated, if they are smaller than the drop in wholesale prices, the spread between wholesale and retail prices for gasoline and diesel is likely to remain high.
On the other hand, extreme supply risks stemming from geopolitical conflicts lead bullish proponents to believe a sharp rebound could occur at any time. Analysis published on the afternoon of April 21st suggested that while the next adjustment, calculated based on current crude prices, starts with a downward trend, overall, the probability of an increase in the next refined oil product price adjustment is relatively high. The core logic behind this view is that differences in US-Iran negotiations remain significant, and the US has not ruled out new military options. Shipping through the Strait of Hormuz is unlikely to resume soon, production from Persian Gulf oil producers remains low, and supply risk concerns persist.
It's not just the core Middle Eastern production region; supply reductions from Russia are also quietly building upward momentum. According to industry sources cited in a report, due to intensive Ukrainian attacks on port facilities and refineries, at least 20% of Russia's oil export capacity is idled, reducing output by about 1 million barrels per day. This is sufficient to tangibly impact oil production from the world's third-largest producer.
Under the combined influence of weak fundamental realities and high geopolitical risks, the outcome of the next refined oil price adjustment is fraught with uncertainty. Will cost-side premiums continue to be squeezed out as geopolitical tensions ease, or will a full-blown escalation of conflict trigger a new upward channel for oil prices? The market will provide the final answer on May 8th.
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