China’s plan to shrink its oil refining industry is moving forward, but experts warn the process will be slow. Industry leaders say it could take up to five years before the country sees real change.

At an energy conference in Singapore, Li Xinhua, head of trading at Rongsheng Petrochemical, explained that the government wants to close down outdated and smaller refineries while pushing investment toward more advanced and profitable materials. The goal is to reduce about 100 million tons of refining capacity.

However, the transition won’t be simple. Deciding which plants to shut requires agreement between central and local governments, and those talks are sensitive because they directly affect jobs. With China’s property market already under pressure, protecting employment remains a top concern.

Trade disputes are also complicating the picture. Li noted that tariffs are distorting global oil prices, cutting into refiners’ profits. As a result, many Chinese companies may lower their fuel output and shift focus toward petrochemicals, which offer better returns.

Analysts believe that while China is committed to modernizing its refining sector, the path forward will be gradual. Balancing economic growth, job security, and global trade pressures means the impact of these cuts won’t be felt overnight.