Soochow Securities·2025-07-21 08:30Report Industry Investment Rating No relevant content provided. Core Views of the Report - The government is strengthening the enforcement of refined oil consumption tax collection and continuing to promote the reform of refined oil consumption tax, which is expected to increase the concentration of the refining and sales industries. Legal enterprises will face a fairer competitive environment, while illegal enterprises may be gradually eliminated [4][68][71]. - The reform of refined oil consumption tax will bring more intense market competition, forcing refineries and gas stations to improve service quality and operational efficiency. In the long term, this will contribute to the healthy development of the entire industry, improve resource allocation efficiency, and ultimately benefit consumers [71]. - Relevant investment targets include Sinopec/China Petroleum & Chemical Corporation (600028.SH/0386.HK) and PetroChina/China National Petroleum Corporation (601857.SH/0857.HK) [8][71]. Summary by Directory 1. Refined Oil Consumption Tax Basic Situation 1.1 Summary Points of Refined Oil Consumption Tax - Consumption tax is an important tax in China's current tax system, aiming to regulate product structure, guide consumption direction, and ensure national fiscal revenue. China has been levying consumption tax on gasoline and diesel at the production stage since 1994 [11]. - The 2024 consumption tax reform aims to shift the collection link to the sales end and gradually transfer it to local governments, which is expected to accelerate the exit of backward refinery capacities and benefit state - owned refineries. However, there are difficulties in implementing this policy, such as affecting the profits of gas stations and increasing the requirements for national tax collection and management [11]. 1.2 Policy Innovations of Refined Oil Consumption Tax (2012 - 2024) - 2012 - 2013: The State Administration of Taxation issued documents to strictly define the scope of refined oil consumption tax collection to prevent tax evasion by refineries through "name - changing sales". However, due to various reasons, the implementation effect was not obvious [14][17][18]. - 2018: The State Administration of Taxation issued Document No. 1, which required all refined oil invoices to be issued through the refined oil invoice issuance module in the new VAT invoice management system. This policy forced some backward refinery capacities and illegal blending capacities to be eliminated [20][21][24]. - 2021: The Ministry of Finance, the General Administration of Customs, and the State Administration of Taxation jointly issued an announcement to levy import - link consumption tax on some refined oil products, expanding the scope of refined oil consumption tax collection [33][34]. - 2023: The Ministry of Finance and the State Administration of Taxation jointly issued an announcement to adjust the scope of refined oil consumption tax collection [36][37]. - 2024: The Central Committee of the Communist Party of China proposed to shift the refined oil consumption tax collection link to the sales end and gradually transfer it to local governments. However, there are implementation difficulties, such as affecting gas station profits and increasing tax collection and management challenges [38]. 1.3 China's Refining Capacity Situation - In 2024, China's total refining capacity was about 955 million tons, showing a pattern of three major forces: central state - owned enterprises, other state - owned enterprises, and private refineries [39]. - After the implementation of the 2018 consumption tax new policy, the operating rate of Shandong local refineries decreased, and the gasoline price increased. Some high - cost refineries were forced to shut down, while some high - quality refineries turned to formal sales channels [40][41]. - Shandong plans to integrate and transfer the refining capacities of local refineries below 300 - 500 million tons by 2022 - 2025 and build large - scale refining integration projects [55]. 1.4 China's Gas Station Situation - In 2023, there were about 123,000 gas stations in China, mainly distributed in Shandong, Henan, Hebei, Guangdong and other regions. Among them, private gas stations numbered about 64,000, accounting for 52% of the total [58]. - In 2024, China's total refined oil consumption was 390 million tons, of which private gas stations sold about 100 million tons, accounting for 25% of the total consumption. State - owned oil companies' gas stations have higher single - station refueling volume and profitability [58]. 2. Major Event Updates of China's Strengthened Refined Oil Consumption Tax Reform in 2025 2.1 The Tax Evasion Incident of Liaoning Baolai Refinery in 2022 - Some enterprises in Panjin, Liaoning evaded refined oil consumption tax by changing the names of taxable refined oil products to non - taxable chemical products. The relevant enterprises were investigated and punished, and the relevant personnel were transferred to the judicial authorities [61]. 2.2 Increased Enforcement of Refined Oil Consumption Tax in 2025: Announcement of Multiple Tax Evasion Cases - In February 2025, tax authorities in Guangdong, Xinjiang, and Yunnan announced the investigation and punishment of three gas station tax evasion cases, including hiding sales revenue through "cheating modes" and non - compliant payment methods [62]. 2.3 The Tax Evasion Incident of Bohui Co., Ltd. in 2025 - After the tax policy change in June 2023, Bohui Co., Ltd. was required to pay consumption tax on its main product, heavy aromatics. In 2024, it was required to pay back taxes of nearly 500 million yuan. In February 2025, the company's controlling stake changed [64][65]. 2.4 China's Special Rectification Campaign Against Illegal Gas Stations in 2025 - From June to December 2025, China will carry out a special rectification campaign against illegal gas stations across the country to severely crack down on illegal refined oil production and sales [68]. 3. Investment Suggestions - The competition of private refineries with non - standard tax payment in the early stage will intensify. They need to improve production efficiency and reduce costs to enhance market competitiveness [71]. - Private gas stations will face greater challenges and direct competition with state - owned oil company gas stations [71]. - The competitiveness of state - owned oil companies will be enhanced, and their market share is expected to expand [71].