Rise in Oil Prices Poses a ChallengeChina's increasing dependence on imported crude oil and current high international prices for crude have posed a serious challenge to the country's energy safety, vital for planned long-term economic growth.Industry insiders estimated that China will probably import this year as much as 50 million tons of oil, one-quarter of its total demand. It is predicted that China's demand for crude oil will grow annually by 4 per cent in the early part of the 21st century. Meanwhile, China's domestic supply to its total demand for oil, including refined products, will fall from its current 80 per cent or so to 71 per cent in 2010 and 62 per cent in 2020, experts estimated. Obviously, the country has increasingly become dependent on imported oil. Customs statistics showed that China imported a total of 22.72 million tons of crude oil during the first four months of this year, increasing by 121.8 per cent over the same period last year. Because of soaring world prices, China has had to spend US$4.334 billion, up 360.9 per cent annually, for its crude imports in the first four months. The cost of crude oil in the international market even hit a nine-year record high at US$30 per barrel in recent months, compared with only US$12 per barrel in April 1998. Though the Organization of Petroleum Exporting Countries (OPEC) decided to raise exports twice this year, the overheated international market has not cooled yet. Chinese experts believe OPEC's supply lift is still not enough to satisfy the demand. Consequently, the prices will stay at high levels for a much longer time. Wang Jian, an economist with China Macro-Economics Institute, said the United States seems to be willing to ensure relatively high oil prices because its booming "new economy" needs less energy supply than before. By contract, other economic bodies including Japan and European Union will suffer more torment from high oil prices. China, at the primary phase of industrialization, is doomed to bear much more pain, Wang said. Therefore, the country is urged to rethink its energy strategy. China needs to start its long-awaited national strategic petroleum reserves as soon as possible to protect its energy supply, said Chen Zhouqi, a veteran energy expert, who was vice-minister of the former Ministry of Geology and Mineral Resources. Besides crude oil, China should rely more on its other abundant energy resources, like natural gas and hydropower. In Beijing alone, consecutive gasoline price hikes have forced more car-owners, especially taxi drivers, to utilize natural gas as their fuel. |
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