Gasoline car demand in China is slumping on higher fuel prices resulting from the crisis in the Middle East, with gas guzzlers such as Range Rover, fetching discounts of up to 60%, Bloomberg reported, citing Chinese media.
The report also cited data from the Chinese Passenger Car Association showing discounts on gasoline cars had almost doubled over the first five months of the year as oil—and fuel—prices crept up.
Chinese passenger car sales dropped by over 22% in May, data released earlier showed, while EV and hybrid vehicle sales rose strongly, coming to account for 62.9% of total car sales, although in absolute numbers their sales also fell, by a more modest 7.5%. Compared to April, however, car sales in May rose by 9.2%, the Wall Street Journal reported earlier this month, citing figures from the Chinese Passenger Car Association.
Beijing has made an effort to cap the rise in fuel prices, notably by tapping its massive crude oil inventories to ensure adequate supply to refiners since the war between the United States and Israel, and Iran began. However, it has been unable to shield local drivers from the price shock entirely, even as imports of crude dropped sharply amid the surge in benchmark prices.
China’s crude oil imports slumped to the lowest in eight years in May. The month’s total stood at 33 million barrels, or 7.8 million barrels daily, which compares to an average daily import rate of 11.6 million barrels last year. Fuel exports were also down, with Beijing careful to make sure there is enough diesel and gasoline for the domestic market—albeit at elevated prices. As a result, refinery run rates also fell markedly, to an average of 66.3%, with total volumes processed over the month down by 9.1% on the year to 53.72 million tons. This was the lowest average run rate in four years.
By Charles Kennedy for Oilprice.com
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