The decision comes in the face of China's growing refining overcapacity, softened fuel demand due to economic deceleration, and the electrification of the country's vehicle fleet, which is progressively reducing the nation's reliance on gasoline and diesel. The shutdown marks the first major closure of a state-run refinery in China and underscores the challenges faced by the country's refining sector. With a reported initial cutback of 210,000 bpd, or about half of the plant's total processing capacity, the refinery is being gradually phased out under a plan that PetroChina, a subsidiary of China National Petroleum Corporation (CNPC), has yet to publicly comment on. Nevertheless, industry insiders confirm that the move is a culmination of various economic, environmental, and safety-related factors that have long pressured Dalian's municipal authorities to reassess the viability of the refinery.