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Energy

Sinopec suspends diesel exports amid domestic market shortage

(Xinhua)
Updated: 2010-11-20 14:46
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BEIJING - China Petroleum and Chemical Corporation (Sinopec), China's largest oil refiner, said Friday it has suspended diesel exports to relieve shortages in the domestic market.

Sinopec also said it is seeking to import 200,000 tons of diesel.

PetroChina Co, China's largest oil producer, plans to import 200,000 tons of diesel. Some 35,000 tons of it has already arrived.

Insiders said China's diesel output in the first nine months soared, prompting the two oil giants to expand exports.

Sinopec attributed recent hikes in the domestic price of diesel to hoarding, seasonal factors, transport factors and energy-saving measures.

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"The fundamental reason for the diesel shortage is the industry monopoly. Oil refiners are not keen to increase production because profit margins in the sector are relatively low," said Qi Fang, director of the Hebei Provincial Petroleum Industry Chamber of Commerce.

"The two oil giants operate on a planned-economy basis, resulting in an unbalanced supply-and-demand situation. Supply and demand can easily outstrip each other as government planning cannot keep pace with changes in the market," Qi said.

Statistics from the General Administration of Customs show China exported 360,000 tons of diesel in October - only slightly lower than the 368,100 tons it exported in September - even as diesel shortages worsened.

Diesel imports in October rose to 400,000 tons, up from 250,000 tons in September.

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