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China to Set Up Oil Reserve System
China is set to accelerate the creation of a sound system for oil reserve to ensure it will be capable of holding an oil reserve of eight million cubic meters by the year 2005, according to a plan released by the State Economic and Trade Commission Thursday.
The oil reserve system will be made up of two parts -- the state reserve and enterprise storage.
The state reserve will be directly controlled by the central government against possible suspension of oil supply and abrupt price hikes to guarantee a stable oil supply.
Enterprises are required to store oil based on their production scale and oil stock for normal operations. The enterprise storage is meant to help stabilize market prices, and the government will draw out incentive financial and taxation policies to support it.
It is predicted that China's oil consumption will continue to rely on import in the future. The demand for crude oil is expected to reach 245 million tons by the year 2005, the commission said.
China is the second largest energy consumer in the world. It became a net importer of oil in 1993. Last year, the country imported 60 million tons of oil.
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