Shifting to high-end market not an easy job for teapots

As China's independent refiners, or teapots, see their costs rising thanks to the country's new taxation system and higher crude oil prices, insiders are urging them to shift focus to the high-end market to avoid their margins being further crushed.

New tax rules implemented last year, including a $38 per barrel gasoline consumption tax and a $29 per barrel tax on diesel, have seen the fortunes of the country's some 40 independent refineries dwindle after several years of bumper profits since they were first allowed to process imported crude oil in 2015.

With new large-scale private refiners set to further squeeze their margins and step up competition, insiders said a shift to the high-end market is the only way out.