International oil prices have soared to almost US$140 a barrel. The world is focused on oil markets. China has been experiencing a diesel oil shortage since early this year. Tian Jinghui, a senior manager of PetroChina, explained on Thursday why diesel is currently lacking in China.
An unbalanced supply-demand relationship in the oil market is the core driver of the current diesel oil shortage in China, said Tian Jinghui, deputy general manager of PetroChina Marketing Company.
Since March of this year, several regions in China have shown signs of diesel oil shortage. Vehicles started lining up outside gas stations in provinces including Zhejiang, Jiangsu, Fujian, Hebei, Beijing and Henan. Lots of gas stations have set limits on when and how much citizens are allowed to refuel.
All these happened although both PetroChina and Sinopec had been increasing their supply of oil products continually, said Tian.
According to Tian, four major reasons have contributed to the current diesel oil shortage in China.
During the first half of this year, China maintained rapid economic development, which led to an accelerated increase in the demand for diesel oil. From January to May this year, PetroChina injected more than 35 million tons of oil products into the market, a rise of 8.6 percent year-on-year. Sinopec also guaranteed a year-on-year growth rate of 18.5 percent in supply, according to Tian. However, this significant increase in supply failed to catch up with the rise in demand.
Also, inverted domestic oil prices added to operating pressures of oil refineries, resulting in a sharp decrease of market oil supply.
The substitution of diesel oil for fuel oil and some crude oil refineries' hoarding activities have also worsened the situation.
Tian said that PetroChina had terminated diesel exports and most petroleum export plans in order to guarantee the domestic oil supply. In the meantime, PetroChina is also significantly increasing its imports to meet the demand in the domestic oil market.
(China.org.cn by Yan Pei, June 13, 2008)
