As the international average oil price approaches US$92, the domestic wholesale price of processed oil saw another leap that resulted in an oil shortfall nationwide. Last week, dozens of cities raised oil price every single day. Diesel oil accounts for the biggest price rise. For example, the wholesale price of Zhengzhou diesel oil number zero rose by 330 to 400 yuan, reaching 6,370 yuan per ton.
"Although the season of autumn harvest has ended, the demand of diesel oil doesn't decline. The demand mainly comes from fishing ships which sail out after termination of the fishing ban. In addition, extra engineering projects also have a strong demand for diesel oil," said Li Yu, chief editor of www.oilboss.cn. Since the continuous increase of the international oil price, domestic oil refineries have suffered heavy losses, forcing them to reduce operation rates.
"We are faced with an increasing oil demand coupled with a decreasing supply. These two trends together push the oil price upwards. The tension between supply and demand will continue in the near future," said Li.
Experts pointed out that the situation might be remedied through a rational pricing system. However, with the current high oil price, it is not the right time to switch to a market-oriented pricing system. The National Development and Reform Commission (NDRC) also confirmed that there was no current plan to raise oil prices.
For more details, please read the full story in Chinese. (http://epaper.dfdaily.com/dfzb/html/2007-10/29/content_19109.htm)
(China.org.cn October 29, 2007)