Due to the enormous pressure of rising oil prices in the international market, the National Development and Reform Commission announced that since June 20, 2008, the price of gasoline and diesel will have risen by 1,000 yuan per ton, and the national average price of electricity will increase by 0.025 yuan per kilowatt-hour since July 1. .
The rise in energy prices has become a very sensitive "nerve" of China's economy. As a fast-growing developing country, it still relies mainly on the government-led economic growth model of investment and exports. It has not yet emerged from the extensive model of high energy consumption and is extremely dependent on energy. serious. Since the first quarter, the continuously rising CPI has brought great pressure on the devaluation of the renminbi. In order to control inflation, the government has adopted tightening monetary policy, which means that tightening funds has a definite deceleration effect on economic growth.
From the perspective of the transmission mechanism of the impact of rising energy prices on China's economy, the following points are worth noting: First, under the circumstances that the CPI is still high, the decision-making level will make this decision based on what considerations; second, whether the rise in energy prices will result in The rise in China’s inflation rate; the third is how it affects the stock market.
The advantages outweigh the disadvantages
From the beginning of 2007 to the present, international oil prices have been climbing all the way up. Because China has always adopted a control policy on oil prices, the government subsidized oil companies, causing a wide gap between domestic refined oil prices and foreign prices. The reason for this phenomenon is not entirely oil shortage, but the phenomenon of “inverted prices†has led some gas stations to choose to reluctantly sell. This time, the price adjustment will alleviate the contradiction between supply and demand in the domestic market to some extent.
Promote the rational distribution of wealth
In the era of market economy, the value of commodities is mainly reflected by prices. For a long time, relatively low oil prices have caused a number of adverse effects, such as the domestic refueling of foreign aircraft, and the refueling of Hong Kong automobile Shenzhen. The state's control over oil prices is achieved by using taxpayers' money to subsidize oil companies. In China, those who own automobiles are often relatively rich people or companies. The state controls energy prices and implements subsidies for oil companies. Its intention is to control inflation and prevent the rising cost of living of the low-income groups from rising too fast. In fact, such subsidies have distorted energy prices, resulting in the waste of resources and subsidizing the “rich†with taxpayers’ money. Therefore, oil prices should have risen long ago, and there is room for further increases. But it's not that the higher the price, the better. The price that can achieve a balance between supply and demand is the best price. If the price is low, it will cause energy waste; if the price is high, it will affect the quality of life. The oil price should be in line with the international market, and the money used to subsidize the relatively affluent people should be used to supply the poor, so as to better promote the harmonious development of society.
Promote energy saving and emission reduction
Affected by the increase in energy prices, especially oil prices, is a private car owner. Before the rise in energy prices, the country relied on subsidies to ensure that the total social wealth and total costs did not change. This would inevitably make owners cherish petrol, which is related to the nature of human beings seeking to avoid disadvantages. For example, the housewife will avoid dropping oil on the panel, but often pay no attention to the use of tap water, because oil is more expensive than water. As soon as the price of oil rises, its direct impact is to make people more economized. The original buyers of cars now choose to wait and see or not to buy; the original choice of more buses or bicycles for cars will help save energy and reduce emissions of harmful gases. At the same time, the government regulation of oil prices has caused enterprises that produce low-carbon energy-saving equipment such as wind power and electric energy to face unfair competition with “oil subsidiesâ€. Reasonable pricing can promote the development of these energy companies and create more employment opportunities and social wealth.
Does not seriously increase overall inflation
Looking separately, this price adjustment has little effect on the overall price level. The price of electricity for residential use has not been adjusted and will not have a direct impact on the consumer price index. The price of electricity for agriculture and fertilizer production will not be adjusted for the time being, which will help stabilize grain prices, thereby stabilizing agricultural production and slowing the pressure on rising general prices. The adjustment of prices of electricity for industrial and commercial enterprises has a limited impact on the total price level.
Compared to electricity prices, the rise in oil prices has aroused more attention. Will the rise in oil prices bring about a chain reaction and produce a progressive increase in prices by increasing the production costs of the industry? I think that everyone can understand the pressure of full inflation caused by rising oil prices, but there is no need to worry too much. The impact of rising oil prices on our lives is far less serious than many people think. Because the state has adopted a series of supporting measures, such as subsidizing farmers, implementing financial subsidies for public transportation and leasing to ensure that transportation prices do not increase, and increasing subsidies for low-income populations.
The rigid demand for oil will certainly have an impact on the cost of living, but this effect is not significant. We have made special calculations. For a private car with a cost of RMB 150,000, the total depreciation, insurance, interest, etc. costs are RMB 80 per day for a 10-year depreciation. Running 50 kilometers per day, the consumption of 10 liters of oil per 100 kilometers is calculated. After the oil price rises, the daily incremental cost is 4.3 yuan, which is an increase of 4%. For individuals or companies with private cars, the slight increase in cost will not bring about too much impact. It will only make people use energy more subconsciously.
The rise in price is determined by two aspects: supply and demand and costs. From the perspective of the composition of China’s CPI, the top 4 products that accounted for the largest proportion of CPI are: food (33%), entertainment and cultural services (15%), housing (12%), and health care products (11%). Due to the direct impact of oil prices being too great, transportation expenditures (10%) directly affected by rising oil prices have already been analyzed. The impact of rising oil prices is limited. Therefore, I think that although this increase in energy prices has brought some pressure on CPI, the most important cause of inflation is the oversupply of government currency and excessive liquidity. The stock market bubble, the housing bubble, and the ever-increasing public funds since last year. consumption.
Good negative, separately
The increase in oil prices and electricity prices is a good news for the petrochemical industry. It will also have a positive effect on the performance of power companies. The oil industry will benefit first, followed by the coal sector and the new energy sector. Of course, this effect cannot be overestimated. The degree of influence is determined by the product of the price adjustment rate and sales volume to determine the degree of interest of the relevant company. However, for most downstream companies, the rise in oil prices and electricity prices means that the increase in costs will directly affect their profits. In particular, high-energy-consuming enterprises that cannot replace or pass on cost substitution will have greater impact, such as production. Electrolytic aluminum companies; followed by aviation companies, rising oil prices will increase their costs and weaken corporate profits. The International Aviation Transport Association (IATA) has released its financial forecasts a few days ago. The dramatic increase in fuel prices has increased fuel costs for the entire industry by $14 billion. The total profit in 2008 has been reduced from the original estimated $7.8 billion to the current $5 billion; again In the automotive sector, the rise in domestic oil prices will undoubtedly increase consumer pressures, weaken consumer purchasing power, and reduce corporate profitability.
The rise in energy prices has become a very sensitive "nerve" of China's economy. As a fast-growing developing country, it still relies mainly on the government-led economic growth model of investment and exports. It has not yet emerged from the extensive model of high energy consumption and is extremely dependent on energy. serious. Since the first quarter, the continuously rising CPI has brought great pressure on the devaluation of the renminbi. In order to control inflation, the government has adopted tightening monetary policy, which means that tightening funds has a definite deceleration effect on economic growth.
From the perspective of the transmission mechanism of the impact of rising energy prices on China's economy, the following points are worth noting: First, under the circumstances that the CPI is still high, the decision-making level will make this decision based on what considerations; second, whether the rise in energy prices will result in The rise in China’s inflation rate; the third is how it affects the stock market.
The advantages outweigh the disadvantages
From the beginning of 2007 to the present, international oil prices have been climbing all the way up. Because China has always adopted a control policy on oil prices, the government subsidized oil companies, causing a wide gap between domestic refined oil prices and foreign prices. The reason for this phenomenon is not entirely oil shortage, but the phenomenon of “inverted prices†has led some gas stations to choose to reluctantly sell. This time, the price adjustment will alleviate the contradiction between supply and demand in the domestic market to some extent.
Promote the rational distribution of wealth
In the era of market economy, the value of commodities is mainly reflected by prices. For a long time, relatively low oil prices have caused a number of adverse effects, such as the domestic refueling of foreign aircraft, and the refueling of Hong Kong automobile Shenzhen. The state's control over oil prices is achieved by using taxpayers' money to subsidize oil companies. In China, those who own automobiles are often relatively rich people or companies. The state controls energy prices and implements subsidies for oil companies. Its intention is to control inflation and prevent the rising cost of living of the low-income groups from rising too fast. In fact, such subsidies have distorted energy prices, resulting in the waste of resources and subsidizing the “rich†with taxpayers’ money. Therefore, oil prices should have risen long ago, and there is room for further increases. But it's not that the higher the price, the better. The price that can achieve a balance between supply and demand is the best price. If the price is low, it will cause energy waste; if the price is high, it will affect the quality of life. The oil price should be in line with the international market, and the money used to subsidize the relatively affluent people should be used to supply the poor, so as to better promote the harmonious development of society.
Promote energy saving and emission reduction
Affected by the increase in energy prices, especially oil prices, is a private car owner. Before the rise in energy prices, the country relied on subsidies to ensure that the total social wealth and total costs did not change. This would inevitably make owners cherish petrol, which is related to the nature of human beings seeking to avoid disadvantages. For example, the housewife will avoid dropping oil on the panel, but often pay no attention to the use of tap water, because oil is more expensive than water. As soon as the price of oil rises, its direct impact is to make people more economized. The original buyers of cars now choose to wait and see or not to buy; the original choice of more buses or bicycles for cars will help save energy and reduce emissions of harmful gases. At the same time, the government regulation of oil prices has caused enterprises that produce low-carbon energy-saving equipment such as wind power and electric energy to face unfair competition with “oil subsidiesâ€. Reasonable pricing can promote the development of these energy companies and create more employment opportunities and social wealth.
Does not seriously increase overall inflation
Looking separately, this price adjustment has little effect on the overall price level. The price of electricity for residential use has not been adjusted and will not have a direct impact on the consumer price index. The price of electricity for agriculture and fertilizer production will not be adjusted for the time being, which will help stabilize grain prices, thereby stabilizing agricultural production and slowing the pressure on rising general prices. The adjustment of prices of electricity for industrial and commercial enterprises has a limited impact on the total price level.
Compared to electricity prices, the rise in oil prices has aroused more attention. Will the rise in oil prices bring about a chain reaction and produce a progressive increase in prices by increasing the production costs of the industry? I think that everyone can understand the pressure of full inflation caused by rising oil prices, but there is no need to worry too much. The impact of rising oil prices on our lives is far less serious than many people think. Because the state has adopted a series of supporting measures, such as subsidizing farmers, implementing financial subsidies for public transportation and leasing to ensure that transportation prices do not increase, and increasing subsidies for low-income populations.
The rigid demand for oil will certainly have an impact on the cost of living, but this effect is not significant. We have made special calculations. For a private car with a cost of RMB 150,000, the total depreciation, insurance, interest, etc. costs are RMB 80 per day for a 10-year depreciation. Running 50 kilometers per day, the consumption of 10 liters of oil per 100 kilometers is calculated. After the oil price rises, the daily incremental cost is 4.3 yuan, which is an increase of 4%. For individuals or companies with private cars, the slight increase in cost will not bring about too much impact. It will only make people use energy more subconsciously.
The rise in price is determined by two aspects: supply and demand and costs. From the perspective of the composition of China’s CPI, the top 4 products that accounted for the largest proportion of CPI are: food (33%), entertainment and cultural services (15%), housing (12%), and health care products (11%). Due to the direct impact of oil prices being too great, transportation expenditures (10%) directly affected by rising oil prices have already been analyzed. The impact of rising oil prices is limited. Therefore, I think that although this increase in energy prices has brought some pressure on CPI, the most important cause of inflation is the oversupply of government currency and excessive liquidity. The stock market bubble, the housing bubble, and the ever-increasing public funds since last year. consumption.
Good negative, separately
The increase in oil prices and electricity prices is a good news for the petrochemical industry. It will also have a positive effect on the performance of power companies. The oil industry will benefit first, followed by the coal sector and the new energy sector. Of course, this effect cannot be overestimated. The degree of influence is determined by the product of the price adjustment rate and sales volume to determine the degree of interest of the relevant company. However, for most downstream companies, the rise in oil prices and electricity prices means that the increase in costs will directly affect their profits. In particular, high-energy-consuming enterprises that cannot replace or pass on cost substitution will have greater impact, such as production. Electrolytic aluminum companies; followed by aviation companies, rising oil prices will increase their costs and weaken corporate profits. The International Aviation Transport Association (IATA) has released its financial forecasts a few days ago. The dramatic increase in fuel prices has increased fuel costs for the entire industry by $14 billion. The total profit in 2008 has been reduced from the original estimated $7.8 billion to the current $5 billion; again In the automotive sector, the rise in domestic oil prices will undoubtedly increase consumer pressures, weaken consumer purchasing power, and reduce corporate profitability.
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