In the 17 year Report on the Work of the Government, it was mentioned in the transportation task that "accelerating the use of national standard fuel oil in key regions". The key areas naturally include first tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen. However, a few days ago, 2+26 cities simultaneously entered the requirements of this standard, requiring full supply of national six standard automotive gasoline and diesel by the end of September, and banning the sale of regular diesel.

The fuel used in national VI vehicles is divided into two indicators and stages for gasoline: A/B, which are scheduled to be fully implemented in 2019 and 2023, respectively. For vehicle diesel, it will be implemented nationwide without stages on January 1, 2019.

Petrochemical industry insiders must have noticed the increasingly strict environmental indicators, frequent environmental inspections, and increasing local environmental standards in recent years. Is there a precedent for the early implementation of National VI standard vehicle fuel. Taking the National Five Year Plan as an example, starting from Beijing, then to 11 provinces and cities in the eastern region, and finally popularized nationwide, one year ahead of the original schedule. Our policies are always implemented as early as possible and not as late as possible. The replacement of national VI oil products in 2+26 cities may be a signal of the necessity to accelerate oil upgrading.

According to Longzhong statistics, as of the end of 2016, the national gasoline consumption was 119.83 million tons, and the national diesel consumption was 164.69 million tons. Among them, the motor vehicle industry accounts for over 95% of the total gasoline consumption and over 60% of the total diesel consumption. A total of 46.07 million tons of various air pollutants were emitted, of which nitrogen oxide emissions accounted for about one-third of the total emissions in China.

Secondly, it is expected that in the next five years, China will add more than 100 million motor vehicles and emit 16 million tons of new pollutants.

Finally, it is a visual manifestation of the harm of motor vehicle pollution. In major cities such as Beijing and Shanghai, as well as densely populated areas in the east, motor vehicles contribute 15.0% to 52.1% of PM 2.5 concentrations; In addition, the World Health Organization has already upgraded diesel exhaust to a clear carcinogen; At the beginning of this month, motor vehicles accounted for approximately 30% of the heavy pollution causes in the Beijing Tianjin Hebei region and surrounding areas.

From the above information, it can be inferred that without upgrading oil products, the pollution situation of motor vehicles in China will become increasingly severe in the coming years, and we do not have much time to allow it to be naturally replaced.

There has been little change in the performance of oil products in the national six indicators, so only the supply capacity of the main and independent refineries needs to be considered.

At the end of last year, Beijing just announced the early replacement of Jingliu gasoline and diesel, and several independent refineries including Haike, Jingbo, Jincheng, and Shangneng exported Jingliu oil products to Beijing. By March 1st of this year, all replacements have been completed, and Sinopec has finally determined the Beijing VI standard oil production and supply guarantee plan, with Yanshan Petrochemical as the main unit and Cangzhou Refining and Qilu Petrochemical as supplementary units. PetroChina has identified several units including Hebei Petrochemical, Dagang Petrochemical, Jinzhou Petrochemical, and Jinxi Petrochemical.

In terms of indicators, the investment in upgrading refineries to National VI is slightly lower than when upgrading to National V, and many large-scale refineries have already been able to produce finished products that meet or approach National VI standards through reasonable allocation of raw materials, devices, and additives. Up to now, there are 11 refineries in Shandong that can produce gasoline or diesel that meets the national VI standards. However, there is still some pressure on reducing olefins and polycyclic aromatic hydrocarbons for steam catalytic and catalytic cracking diesel oil refiners that do not use MIP technology.

However, overall, with the improvement of crude oil quality, the construction of continuous reforming and hydrogenation units, and the oversupply of gasoline and diesel, there is not much difficulty in achieving phased popularization in different regions.

Perhaps there will be "Shanghai Nanjing Hangzhou City Belt" and "Guangzhou Shenzhen City Belt" appearing and joining the planning in the future, and oil replacement will gradually expand from key regions to provinces and cities, and then to the whole country. The wind started at the end of Qingping, and flexible mechanisms and early layout have always been the advantages and opportunities of independent refineries. However, for small refineries, they may face a more awkward situation.