Sinopec suspends refined oil exports to ensure domestic supply

15:13, April 21, 2011      

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China Petrochemical Corporation, also known as Sinopec Group, announced on April 19 that it has indefinitely suspended exports of refined oil to regions other than Hong Kong and Macao in a bid to ensure domestic supply. The suspension will not be lifted unless the market situation improves.

The second quarter is traditionally the peak period for refined oil consumption. Wang Shunzeng, secretary-general of the Beijing Oil Products Circulation Industry Committee, said Tuesday that due to the gradually warmer weather, more cars are on the road. As a result, the oil demand in the construction, manufacturing, logistics, and transportation industries has recovered, which will greatly increase the consumption of oil products in April.

According to statistics released by bulk products online trading platform Treasure Island on April 19, the wholesale price of gasoline is a little lower than retail ceiling prices in China, and the wholesale of gasoline to private gas stations has been suspended in many areas.

The wholesale price of diesel has been almost the same as retail ceiling prices for a long time and has even exceeded the ceiling prices in certain provinces including Shanxi, Henan, and Hubei. There is a nationwide shortage of diesel, and the wholesale of diesel to retailers and private gas stations has been suspended in northern and eastern China.

According to statistics released by the National Development and Reform Commission on April 19, China's apparent consumption of oil products (the sum of domestic output and net imports) climbed to a record high of 21.7 million tons in March, with average daily consumption up nearly 14 percent from the previous month and nearly 12 percent from a year earlier. Meanwhile, China's refined oil stocks fell at the end of March from record levels at the end of February and descended to the same levels as last March.

Sinopec is China's largest oil refiner and forms the backbone of the domestic refined oil supply chain. The company said yesterday that China is suffering from insufficient oil resources and is under increasing pressure to ensure refined oil supply. Sinopec hopes to increase the output of refined oil by halting exports, continuing to run its refineries at full capacity and other means. It plans to produce 10.5 million tons of refined oil in April, an increase of 410,000 tons from a year earlier, according to information from Sinopec's production management division.

By People's Daily Online

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