CCTV.com - CNTV English - CCTV News


Homepage > News > Biz >

China urged to open up crude oil import market

11-07-2011 08:58 BJT

BEIJING - Some of the country's private-held oil companies are clamoring for the relaxation of the tight government control of crude oil imports to alleviate the widespread chronic diesel shortfalls during seasonal spikes.

So far the country's three biggest State-owned oil companies dominate more than 95 percent of China's crude imports. The small refiners and filling stations in the downstream sector suffer a shortage of raw oil when demand rises, as a result.

The dominance of oil sources by the biggest national oil conglomerates gives a distorted picture of the real market situation, which is deep at the root of the long-term diesel shortage during peak seasons, said Qi Fang, president of Zhangjiakou United Petroleum and Chemical Co, which runs six private filling stations in Hebei province.

China's fuel shortage is deteriorating since the demand hike during the autumn harvest amid the price cuts on fuel by the government in October that have largely eroded refiners' margins.

On Oct 29 the government ordered the country's top two oil refiners, Sinopec and PetroChina, to raise the amount of diesel distribution to areas in dire need and to avoid diesel shortfalls affecting the agriculture sector.

"It's absurd that this year's diesel shortage is occurring at a time when international crude oil supply is abundant and the crude prices are sliding," said Zhang Yue, president of China Chamber of Commerce for Petroleum Industry (CCCPI), a non-profit organization backed by the country's private-held oil companies.

Zhang, who chairs the Tadee Group, involved in petroleum storage services based in southeastern Zhejiang province, blamed the State-owned oil firms for hoarding oil that forced some local refiners to shut down, leading to a diesel shortage in the filling stations.

Sinopec, however, said on its website that its refineries were operating at full capacity, trying to meet the demand.

"We strongly ask for a more open and fair petroleum market, in which local oil companies are allowed to participate in the upstream oil exploration and import crude and fuel from overseas market, " Zhang said.

According to CCCPI's figures, the proportion of local filling stations have dropped from 60 percent to 40 percent in recent years after Sinopec and PetroChina tightened their controls of crude oil amid aggressive mergers and acquisitions for local refineries and filling stations.

"The number of local refineries will continue to shrink if the monopoly of top State-owned oil companies continues, which may lead to long-term diesel shortfalls in the market," Qi said.

Gao Yan, vice-director of Unirule Institute of Economics, a non-governmental economic research centre, however, warned that the opening up cannot be too bold at the very start.

He suggested the government introduce more State-owned oil companies besides the top three in the fray. The primary task is to increase the domestic supply before gradually opening the market to local companies, he said.

Editor:Zhang Jianfeng |Source: China Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program