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Page added on November 21, 2010

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China suspends diesel exports amid domestic market shortage

Business

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 tonnes of diesel.

PetroChina Co., China’s largest oil producer, plans to import 200,000 tonnes of diesel. Some 35,000 tonnes 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.

“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 tonnes of diesel in October – only slightly lower than the 368,100 tonnes it exported in September – even as diesel shortages worsened.

xinhuanet



One Comment on "China suspends diesel exports amid domestic market shortage"

  1. KenZ300 on Mon, 22nd Nov 2010 1:31 am 

    Last month China suspended shipments of rare earth metals now it suspends exports of diesel. Is this the start of countries hoarding resources to protect their own populations?

    How long will it be before the smaller oil exporting nations stop exporting oil to ensure domestic supplies for their own citizens. Will that leave the oil supply for export in the hands of only a few countries? With competition from fewer and fewer countries, will prices rise because of the monopolistic powers of a few large exporters. Lack of competition for energy supplies is not good.

    It is time to diversify our energy types and sources. Wind, solar, geothermal and biofuels all need to ramp up production.

    It is time for greater public and government support of clean, safe alternative energy.

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