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Page added on October 30, 2007

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China top refinery cuts output despite shortages

BEIJING/SHANGHAI, Oct 30 (Reuters) – China’s largest refinery Zhenhai Refining & Chemical Co Ltd will shut a crude distillation unit in November for a one-month planned turnaround, an industry official said.


The closure comes as the country faces its worst diesel shortage in four years, which has caused rationing on the east coast.


Zhenhai refinery, a unit of state refiner Sinopec Corp, will switch off a 100,000 barrel per day crude unit in November and is expected to process 379,600 bpd, 3 percent less crude than in October, the refinery official told Reuters.


By cutting output at a time of such shortage, Sinopec, Asia’s largest refiner, may be sending a signal to the government that it needs to ease its tight controls on retail pump prices, industry officials say.


Refiners face losses in China as they cannot pass on the increased costs from record oil prices to consumers.


Reuters



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