Current Situation and Development Trend of China's Oil Refining Industry

In 2021, China’s domestic oil refining industryachieved breakthrough development, with refining capacity exceeding 900 milliont/a, crude oil processing volume exceeding 700 million t/a, and refined oilproduction and consumption returning to growth. Against the background ofaccelerated green and low-carbon transformation of energy consumption, the oilrefining industry continues to accelerate structural adjustment, transformation,and upgrading. “Reducing refined oil products and increasing chemical and specialtyproducts” has become the development trend of the industry. The technology ofmaximizing the production of chemicals is becoming more and more widely used.

Primary Data of China’s Oil RefiningIndustry from 2016 to 2021, milliontonnes

Source: Research Institute of Petroleum Economicsand Technology, National Bureau of Statistics, General Administration ofCustoms

During the “14th Five-Year Plan” period (2016-2022),China’s refined oil supply is under great pressure. For one thing, the demandfor refined oil in the domestic market reached its peak around 2016, and the consumerdemand for diesel has also entered a plateau, showing a trend of slow decline.

For another, due to the accelerated rate of new energyvehicle replacement in China in recent years, domestic consumer demand forgasoline is expected to peak around 2025.

In the future, the domestic oil refining industry willcontinue to accelerate structural adjustment and transformation.

First, the refinery will continue to promote “reducingrefined oil products and increasing chemical output” and adjust productstructure. On the basis of moderately increasing the production of aviationfuel, low-sulfur marine fuel, base oil, and other oil products, the productionof light chemical oil, new high-value-added chemical materials, and high-endspecialty chemicals will be increased.

The second is to continue to promote technologicalinnovation and make breakthroughs in a number of common technologies and core andkey technologies for low-carbon and clean development.