#Autumn Life Season#In its most recent financial report, China's state-owned oil giant China National Petroleum Corporation (CNPC) posted a serious loss in the first half of the year, reaching nearly 30 billion. Meanwhile, its neighboring Malaysian oil company has made a net profit of more than $100 billion. These two seemingly opposite situations have led to a discussion of the reasons behind them. One view is that this gap may have something to do with CNC's tax strategy.
We need to understand the relationship between oil prices and taxes. In China, oil companies' profits are subject to a large number of taxes, including resource tax, land use tax, corporate income tax, etc. These taxes and fees have largely affected the profitability of oil companies. And Malaysia's oil companies may have saved on taxes and fees due to their different tax policies, thus improving their profitability.
That's not the only reason. CNPC's losses may also be linked to its business model. CNPC is the largest oil production and sales company in China, and its business covers oil exploration, exploitation, refining and sales. Although this model of the whole industry chain is conducive to controlling costs, it also makes the company face greater risks in all links. Once the market environment changes, or there is a problem in a certain link, it may lead to the company's overall loss.
CNPC also needs to face fluctuations in international oil prices. In recent years, international oil prices have been running at a low level, which is undoubtedly a huge challenge for Chinese oil companies. On the one hand, low oil prices have reduced the company's mining costs, but on the other hand, due to weak market demand, the company's sales revenue has also fallen sharply.
Overall, CNPC's losses may be the result of a combination of factors, of which tax strategy is only one of them. For CNPC, how to optimize its business model, reduce operational risks and improve its profitability will be an important issue that it needs to face in the future.