Impact Study Of The International Oil Price Volatility On The Price Level In China

As the major strategic material and special commodity, petroleumplays a key role in national economic development. With the rapidgrowth of the national economy, there is an increasingly strong demandfor petroleum domestically, while domestic petroleum production lags farbehind, thus resulting in a gap between its demand and supply largeyear-by-year increasingly. The present solution is petroleum import bygeneral trade. However, the rapid increases of oil price since 2001 havebeen largely affected China's economy. It is of vital, actual significanceto work out relative countermeasures, by analyzing the relationshipbetween world oil price and domestic price level, for evading price risk ofpetroleum import and steadying domestic price.This article encircles the core of relation between international oilprice and domestic price and describes actuality of petroleum demand andsupply and trade. Through making the detailed statistical data contrast, itmakes the qualitative analysis in the relate principles of economicsfoundation by using the induction and the causal relation method, thenexploits the conduction channels of the shakes of oil price to price on thebase of China's particularity in petroleum industry. The domestic crudeoil price follows closely the international oil price trend, but domesticrefined oil price obviously lags in international level because of nationalrefined oil price system. The influence to the relate industries ofpetroleum is weaken gradually along with the industrial chain extending.After that, this article chooses three representative price indexes, andquantitatively analyzes the influences of the shakes of oil price in fivesets of two variables system by utilizing Lag-Augmented VectorAutoregressive, Granger Casualty Test and Generalized ImpulseResponse Function. The rise of international oil price has the remarkableinfluence on our country raw material, fuel, power purchase price, thenconducts to the ex-factory price of industrial products, but the influenceto consumer price is not remarkable. The last chapter makes a conclusionand puts forward relative countermeasures for your information.