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BIZCHINA> Top Biz News
CNPC, Sinopec assure refined oil supply
By Zhao Tingting (chinadaily.com.cn)
Updated: 2009-05-21 16:09

China's State-owned oil giants China National Petroleum Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec) yesterday refuted earlier media reports that they had halted refined oil wholesaling operations in some areas in China, according to Xinhua News Agency.

The two companies also claimed that in order to support reconstruction work, they have adopted measures to ease the refined oil supply shortages in Chengdu, Sichuan province, caused by strain on railway transportation.

Some purchasers have stocked up on refined oil because of price hike expectations, which were viewed as abnormal demands by Sinopec. The company stopped wholesaling refined oil to these purchasers, while for common buyers, wholesaling businesses went on as usual, Sinopec said.

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Driven by China's recent economic recovery, domestic refined oil demand rose and resulted in temporary supply strains, said CNPC. Under such conditions, the company had to meet demands of its affiliated gas stations and contracted customers as a priority, and reduced supply to other customers, but never did it suspend wholesaling operations.

Nevertheless, the two companies were concerned that refined oil speculation may exacerbate price hike expectations.   

The National Development and Reform Commission (NDRC) said on May 8 that China would adjust domestic fuel prices when global crude prices reported a daily fluctuation band of more than 4 percent for 22 working days in a row.

The government's latest fuel price adjustment raised the benchmark retail price of gasoline by 290 yuan ($42) per ton,, and diesel by 180 yuan per ton on March 25.

This came at a time when crude oil for June delivery was about $54 per barrel on the New York Mercantile Exchange. It has since climbed to over $60 a barrel by May 19.


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