Refined oil is relative to crude oil, refers to the crude oil after processing after the formation of gasoline, kerosene, diesel, etc., in addition to the use of biomass synthesis of ethanol gasoline, biodiesel and so on.

China is a country with a lack of oil resources.In the era of insufficiently developed economy, domestic oil consumption is small, so limited oil production can also be used for export in exchange for valuable foreign exchange.With the development of the economy, the national economy has more and more demand for oil, oil exports have gradually decreased, by the early 1990s, China has become a net oil importer, and the number of imports has increased year by year.

China's oil imports are divided into two parts: crude oil and refined oil, the current import volume of the two is basically the same, both are about 20 million tons.The processing of crude oil to refined oil is a high value-added process, and the import of refined oil is equivalent to giving this part of the value to foreign refining companies, which is obviously a disadvantage for China.However, the production capacity of domestic refining enterprises is limited and cannot meet the needs of the national economy, so the state has to import a considerable amount of refined oil.In addition, there is a more serious problem, that is, the cost of domestic refining is much higher than that of developed countries, and the refined oil of developed countries is shipped to China, and the freight rate is still more than 20% cheaper than domestic refined oil, which makes smuggling of refined oil once a very profitable business.

In order to protect domestic refining enterprises, the state has taken a series of restrictions on refined oil imports, including import quotas and high tariffs, under the protection of tariffs, the price of imported refined oil is the same as domestic oil, and domestic oil has room for survival.

For China's refined oil market, Western countries have always been looking at each other, so in the WTO accession negotiations, the elimination of refined oil import quotas and the reduction of tariffs have become an important condition.Of course, the oil sector is strongly opposed to this, for no reason, if foreign refined products are allowed to enter the Chinese market, at least half of the refineries under the oil sector will go bankrupt, which is not a joke.But if we insist on the protection of refined oil products, it means that the interests of other industries must be abandoned in exchange, and other industries are equally important, and the hands and hands are meat, which interests should the state give up?

The Ministry of Foreign Trade submitted this issue to the National Development and Planning Commission, which is also very difficult.Oil is known as the blood of industry, in the early years of the country's foreign exchange shortage, oil exports almost propped up the country's foreign trade half the sky, how much the country's much-needed machinery and raw materials are in exchange for oil, and the oil sector thus gained a strong voice.Over the years, the country's ability to generate foreign exchange has increased, oil has also changed from export to imported goods, and the oil sector's voice in the country has declined.But the thin camel is bigger than the horse, and the commission wants to move the cheese of the oil sector, or weigh it.

“The oil industry needs to be protected.The problem of refined oil products is not only an economic issue, but also a national strategic issue.The supply of refined oil is related to the normal operation of the entire national economy, and it directly affects the combat capability of the army in times of war.Such a sector, if completely controlled by foreign countries, is very dangerous for our country.”Wang Zhenbin said.

Xu Zhenbo asked, “Director Wang, do you mean that if we significantly reduce the import tariffs on refined oil products, then this market will be controlled by foreign countries?”

“Basically, that is.”Wang Zhenbin said, "developed countries' refining technology is more advanced than us, their refining costs are much lower than ours, and domestic refining companies can be maintained because of tariff protection."If this layer of protection is removed, our domestic refining companies will not be rivals at all.”

“Are you too pessimistic?”Xu Zhenbo said, "This time we have entered into the WTO negotiations, the industry that needs to be liberalized is not only the refined oil."We’ve done some stress tests to show that most industries may suffer some shocks at an early stage, but they can survive and develop when they adapt.The labor costs in our country are much lower than those of the developed countries in the West, which is our competitive advantage.If this advantage is played out, it will completely offset the technological advantage of foreign countries.”

Wang Zhenbin said: "The refining industry is different from the industries you mentioned.Refining industry is a typical capital-intensive industry, labor advantage here can not play a big role, production technology and scale is the most critical.On this issue, we have done a survey, at present, the largest production scale of our domestic refineries is less than 10 million tons per year, and only two sets of single series production capacity exceed 5 million tons per year, while foreign countries have an annual output of 30 million tons of devices, and a single series of processing capacity can reach an annual output of more than 12.5 million tons.Last year, the average processing capacity of global refineries was 5.58 million tons, while our average size was only 1.18 million tons, and some small refineries produced less than 200,000 tons per year.You know, now pay attention to the scale of the economy, the larger the scale, the lower the cost, the smaller the size of our refining equipment than others, how can the cost not be high?"

Xu Zhenbo frowned and said, "That is to say, our oil refining companies are not enough, and we are sure that they can't compete with others."If we let go of this market, we will only have to surrender."

“It’s not very nice to say surrender, but it is.”Wang Zhenbin said.

“What does Feng always think about this?”Xu Zhenbo turned his head to Feng Xiaochen.He knew that Wang Zhenbin had asked him over, and Feng Xiaochen had also come to him, obviously not letting Feng Xiaochen come as an audience.In front of this problem, perhaps only Feng Xiaochen can find a way to break the game.

Feng Xiaochen listened to Wang Zhenbin reported a bunch of data, he understood the other side's meaning, he smiled, said: "Old Wang, at least five years ago, we equipment industry company to the then National Planning Commission to report, asked to stop the annual output of 1 million tons of refining equipment, the new project must be an annual output of more than 5 million tons of equipment."The National Planning Commission has supported our report, but there has been no substantive action, and many small devices of 1 million tons have been launched in various places.Now, you tell me that the refinery is too small and uncompetitive, what is the use of it?”

"You stand and talk without pain."Wang Zhenbin did not quench the good, "Five years ago, what kind of situation is the country?"A set of equipment with an annual output of more than 5 million tons is at least 6 billion, who can get it?1 million tons of small devices with low efficiency and high energy consumption are all shortcomings, but it is also good, the biggest benefit is that it is cheap, and a province can afford to support it, and it does not require the state to pay.At that time, there was a lack of oil all over the country, not these small devices, can we persist until now?

Feng Xiaochen was speechless.He had to admit that there was some truth to Wang Zhenbin’s words.A few years ago, the domestic supply of refined oil products was very tight, and the state could not afford such a large-scale investment to build a new large-scale oil refinery.Therefore, the National Planning Commission can only allow local "local methods to start" and engage in some small-scale refineries.These small refineries have high production costs and waste, but they do produce refined oil products, so that the country does not have to spend huge amounts of foreign exchange to import refined oil.China's economy has maintained an average annual growth rate of 8% over the years, and the contribution of these small refineries cannot be underestimated.

Is this really in the refining industry?The same is true for the steel industry.Economic development, steel demand soared, the domestic supply of steel is insufficient, and to import steel to use valuable foreign exchange.In this case, small steel mills are engaged in large and small steel mills in Europe and the United States, which have been phased out in small equipment for production, and at the cost of serious pollution and huge waste, they meet the steel demand of all walks of life.The small steel that has spent a lot of effort to eliminate in the future can be made of great credit in the year.

In the early 1970s, in order to increase food production, the National Planning Commission implemented the "local five small industries" in the country to support small and medium-sized nitrogen fertilizer factories in Malaysia to meet the needs of rural fertilizers.This small nitrogen fertilizer device with an annual output of 5,000 tons to 50,000 tons was also considered backward production capacity at that time, but for a country with no funds and no technology to build large nitrogen fertilizer plants, the production of this small device is also not good at sending carbon in the snow.

"Well, you're right."Feng Xiaochen decided not to talk to Wang Zhenbin's theory, people are engaged in macro-control, than their own pure equipment manufacturing people certainly know the situation.He said: "In the past, in order to meet the market supply, we launched a lot of small and medium-sized refining equipment, now to join the WTO, these small and medium-sized equipment is not competitive at all, what can I do?" 」

Wang Zhenbin said: "I ask you to come, I want to ask you to help assess whether these small equipment is possible to upgrade, we do not want to achieve the scale of foreign production, as long as you can slightly increase, but also reduce the cost a little."At that time, the state will secretly give a little subsidy, coupled with some policy support, in the face of foreign competition, will not have to return."

Feng Zhichen shook his head and said, “Old Wang, I can’t agree with you on this idea.”Small device upgrade, we can also do, but those annual output of 200,000 tons of small devices, even if transformed into 500,000 tons, 1 million tons, still not competitive.The investment in equipment upgrading is not a small amount, and if the state is subsidized after the renovation, when will these investments be recovered?”

“What about you?”Wang Zhenbin directly threw the ball to Feng Xiaochen, he asked Feng Xiaochen to come today, just want Feng Xiaochen to come to the idea, before he said those words, just to make a pavement.

Feng Xiaochen laughed bitterly, is he too handsome, why do everyone think he is a person who can solve the problem?