Refined oil is relative to crude oil, which refers to gasoline, kerosene, diesel, etc., which are formed after crude oil processing, in addition to ethanol gasoline and biodiesel synthesized from biomass.

China is a country with a lack of oil resources. In the less developed economic years, domestic oil consumption was low, so the limited oil production could be used for export in exchange for valuable foreign exchange. With the development of the economy, the demand for oil in the national economy is increasing, and oil exports are gradually decreasing, and by the early 90s, China has become a net importer of oil, and the number of imports is increasing year by year.

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

In order to protect domestic oil refining enterprises, the state has adopted a series of restrictive measures for the import of refined oil, including import quotas and high tariffs.

Western countries have always been eyeing China's refined oil market, so in the WTO accession talks, the abolition 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 other reason, and if foreign refined oil products are allowed to enter the Chinese market, at least half of the refineries under the oil sector will go bankrupt, which is no joke. But if we insist on the protection of refined oil, it means that we must give up the interests of other industries in exchange, and other industries are equally important.

The Ministry of Foreign Trade submitted this issue to the State Development and Planning Commission, which was also in great difficulty. Oil is known as the blood of industry, in the early years when the country's foreign exchange was in shortage, oil exports almost supported half of the country's foreign trade, how many countries urgently needed machinery and equipment and raw materials were exchanged for oil, and the oil sector also gained a strong voice. In recent years, the country's ability to earn foreign exchange has improved, and oil has changed from an export commodity to an imported commodity, and the oil sector's voice in the country has declined. However, the emaciated camel is bigger than the horse, and the Development and Planning Commission still has to weigh the cheese in the oil sector.

"The refined oil industry must be protected. The problem of refined oil is not only an economic issue, but also a national strategic issue. The supply of refined oil products has a bearing on the normal operation of the entire national economy, and in wartime, it has a direct impact on the combat capability of the armed forces. 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, then this market will be controlled by foreign countries?"

"That's pretty much it. Wang Zhenbin said, "The refining technology of developed countries is more advanced than ours, and their refining costs are much lower than ours, so domestic oil refining companies can maintain because of the protection of tariffs." If this layer of protection is canceled, our domestic oil refining companies will not be opponents at all. ”

"Are you too pessimistic?" Xu Zhenbo said, "This time we are holding talks on joining the WTO, and the industry that needs to be liberalized is not only refined oil." We've done some stress tests to prove that most industries may be a little bit shocked at first, but they can survive and thrive after adapting. The labor cost of our country is much lower than that of the developed countries in the West, which is our competitive advantage. If this advantage is brought into play, it will be able to completely offset the technological superiority of foreign countries. ”

Wang Zhenbin said: "The refining industry is different from the industries you mentioned. The refining industry is a typical capital-intensive industry, where labor advantages do not play a big role, and production technology and scale are the most critical. On this issue, our Development and Planning Commission has done a survey, at present, the maximum production scale of our domestic refineries is less than 10 million tons per year, and there are only two sets of single series production capacity exceeding 5 million tons per year, while foreign countries already have an annual output of 30 million tons, and the annual output of a single series of processing capacity can reach 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 a year. As you know, we are all paying attention to economies of scale, the larger the scale, the lower the cost, and the scale of our oil refining equipment is much smaller than others, how can the cost not be high?"

Xu Zhenbo frowned and said, "In other words, our oil refining enterprises are congenitally deficient, and they will definitely not be able to compete with others." If we open up this market, we will only have the only way to surrender. ”

"It's not a nice thing to say, but it's true. Wang Zhenbin said.

"What does Mr. Feng think about this?" Xu Zhenbo turned his head to Feng Xiaochen. He knew that Wang Zhenbin invited him over, and then asked Feng Xiaochen to come over, obviously not to let Feng Xiaochen be the audience. In front of this problem, perhaps only Feng Xiaochen can find a way to break the situation.

Feng Xiaochen understood what the other party meant when he heard Wang Zhenbin report a bunch of data, he smiled and said: "Lao Wang, at least five years ago, our equipment industry company reported to the State Planning Commission at that time, requesting that the oil refining equipment with an annual output of less than 1 million tons be stopped, and the new project must be equipment with an annual output of more than 5 million tons. The State Development Planning Commission supported our report, but there was no substantive action, and many new small installations of 1 million tons were launched in various localities. Now, what is the use of you telling me that the refinery is too small and uncompetitive?"

"You don't have a backache when you stand and talk. Wang Zhenbin choked angrily, "Five years ago, what was the situation of the country? A set of equipment with an annual output of more than 5 million tons was at least 6 billion yuan, who can take it? A small device of 1 million tons has low efficiency and high energy consumption, which are all shortcomings, but it also has advantages, and the biggest advantage is that it is cheap, and a province can afford it, and it does not need the state to pay for it." At that time, there was a shortage of oil throughout the country, and if it wasn't for these small devices, would we have been able to hold on until now?"

Feng Xiaochen was speechless. He had to admit that there was some truth in 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 investment in the construction of a new large-scale refinery. As a result, the State Development Planning Commission can only allow all localities to "put their own laws into practice" and set up some small-scale oil refineries. These small refineries have high production costs and high 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 products. China's economy has maintained an average annual growth rate of 8% in recent years, and the contribution of these small refineries should not be underestimated.

In fact, this is not only the case in the oil refining industry, but also in the steel industry. With the development of the economy, the demand for steel has increased sharply, the domestic supply of steel is insufficient, and the import of steel has to use precious foreign exchange. In this case, small steel mills are built in various places to produce with small equipment that has been eliminated in European and American countries, which meets the steel needs of all walks of life at the cost of serious pollution and huge waste. The small iron and steel that later generations spent a lot of effort to eliminate were all made great contributions back then.

Going back further, in the early 70s, in order to increase grain production, the State Development Planning Commission implemented the "five small local industries" throughout the country, and supported the establishment of small and medium-sized nitrogen fertilizer factories in various localities to meet the demand for chemical fertilizer in rural areas. This kind of small nitrogen fertilizer plant, which has an annual output of 5,000 to 50,000 tons, was already backward at that time, but for a country that has neither the capital nor the technology to build a large-scale nitrogen fertilizer plant, the commissioning of such a small plant is tantamount to sending charcoal in the snow.

"Well, you have a point. Feng Xiaochen decided not to reason with Wang Zhenbin, people are engaged in macro-control, and of course they understand the situation better than themselves, who are purely engaged in equipment manufacturing. He said: "In the past, in order to meet the market supply, we launched a large number of small and medium-sized oil refining equipment, and now we want to join TO, these small and medium-sized equipment is not competitive at all, what can I do?"

Wang Zhenbin said: "I invite you to come over, I want to ask you to help assess whether it is possible to upgrade these small equipment, we do not seek to reach the scale of foreign production, as long as it can be slightly improved, it can also reduce the cost a little." When the time comes, the state will secretly give a little subsidy, plus some policy support, and in the face of foreign competition, it will not be powerless to fight back. ”

Feng Xiaochen shook his head and said, "Old Wang, I can't agree with your idea. We can also do the upgrading and transformation of small devices, but those small devices with an annual output of 200,000 tons, even if they are transformed into 500,000 tons or 1 million tons, they are still not competitive. The investment in equipment upgrading is not a small amount, and if the state has to subsidize it after the transformation, when will these investments be recovered?"

"What about your opinion?" Wang Zhenbin kicked the ball directly to Feng Xiaochen, he invited Feng Xiaochen over today, just to let Feng Xiaochen come up with an idea, what he said before was just a foreshadowing.

Feng Xiaochen smiled bitterly, is he too handsome, why do everyone think that he is a person who can solve problems?