Sinopec has basically halted outsourcing of oil products in some areas as expectations on hikes in retail ceilings did not come true amid slumps in international crude prices.
The oil giant reduced outsourcing prices recently, which were far lower than the current market level, many traders told C1.
The news was confirmed by sources with some sales branches of Sinopec, which also revealed guidance gasoil outsourcing prices were flat with wholesale ceilings while those of gasoline Yuan 400/mt lower than wholesale prices.
Early in May, Sinopec outsourced gasoil at retail ceilings, about Yuan 500/mt higher than inner settlement prices between regional marketing companies and provincial sales branches; it purchased gasoline at wholesale ceilings, Yuan 100-200/mt above inner settlement prices.
Sinopec encountered supply shortage early May, especially for gasoil, a company source said, adding it is not economic to outsource oil products as wholesale prices went into downtrend.
