In mid-January this year, the international oil price once fell below 30 US dollars, which was the first ultra-low oil price seen since the end of 2003. Do you still remember how much the oil price was more than a year ago? At that time, it was a sky-high price of more than 100 yuan per barrel! Oil prices plummet, not only luck will be happy Photo Credit: Marta Diarra CC BY 2.0 Photo Credit: Marta Diarra CC BY 2.0 When oil prices fall and hit rock bottom, the happiest people are of course those who are heavily dependent on oil—transporters, commuters by car, home delivery and freight companies, airline companies... These people who used to complain because of high oil prices have now become the most direct beneficiaries. ethnic groups. For people who don't drive and rarely fly on weekdays, can't they enjoy the benefits of low gas prices? Actually not. Because Asia itself is a heavy-use region of oil, the fall in oil prices is also great news for Asian countries including Taiwan.
How dependent is Asia on oil? According to the statistics of British Petroleum, as of 2014, the total amount of oil imported in the Asia-Pacific region is 2 million barrels a day, which is four times more than the 500,000 barrels demand in North America. The Asia-Pacific region is also the world's largest oil importer in terms of value, with a net oil import value of US$393 billion a year. Three of the world's top five oil importers are China, India and South number list Korea from Asia. For Asian countries, "the more oil falls, the more you save." With cheap oil prices, prices will follow. The low inflation environment also allows Asian central banks to continue to adopt loose monetary policies, which in turn stimulates economic growth. Low oil prices greatly reduce costs and increase gross profits for Asian companies. Lower oil prices not only help the overall economy in Asia, but for many companies, it means lower costs and higher gross profits. According to CLSA estimates, an average of 37% of the operating costs of Asian companies is directly related to oil prices; for example
During the sharp drop in oil prices in 2015, the gross profit growth rate of Asian companies is estimated to have increased by 1.1%; If oil prices fall below $20 a barrel, the average (pre-tax/interest) profitability of Asian companies is expected to increase to 15.9%. This kind of analysis, of course, is exciting and good news for major business owners or employees in Asia. Photo Credit: UnileverCC BY-SA 2.0 Photo Credit: UnileverCC BY-SA 2.0 For example, the well-known shampoo and bath personal products manufacturers Hindustan Unilever and Unilever Indonesia, as well as the top ten paints in the world with a market share of more than 50% in India Paint company – Asian Paints, in the operating cost structure of these companies, the cost closely related to crude oil is as high as one-third, which can be said to be a veritable beneficiary of the falling oil price. The two major Unilever companies are also expected to see significant growth in gas sales due to the increase in the disposable income of the public; and Asian Paints, in addition to the increase in gross profit, is also a major advantage in terms of price competitiveness! As long as oil prices remain low, these companies will be able to keep smiling and making a fortune. "100 yuan oil price" can't go back for the time being.