China's top oil refiner yesterday said it will cut refined oil product exports and increase crude oil imports to "ensure a stable fuel supply in the domestic market first," as oil shortages and rationing continue across the country.
China Petroleum & Chemical Corporation, which is also known as Sinopec, unveiled a 10-step program including near-record diesel imports, higher output for December and delayed maintenance work at five plants, the firm said in a company newspaper report on its website yesterday.
The company will import 200,000 tons of crude oil more than planned in December and boost refining the same month to about 14.5 million tons, the report said.
Besides, the company will "show its social responsibility" by "controlling and cutting" fuel exports to ensure domestic market supply is stable first rather than pursing profits, the report said.
"We require every producing and sales unit to give (the country's) overall interests higher priority, do everything possible to ensure market supplies, and at the critical moment properly fulfill the political and social responsibilities of a state-owned enterprise," the report said.
Apart from higher imports and refining, the company will delay maintenance at Zhenhai, which is the country's largest refinery, Jinan, Hainan, Yangzi and Jiujiang plants and bring a unit at the Gaoqiao refinery online ahead of schedule.
It plans to cut kerosene output by 80,000 tons in November and use the capacity to produce diesel, the report said, and import 277,000 tons of refined oil products -- likely covering just diesel, kerosene and gasoline. That compared had just 196,000 tons of imports in September and October.
Sales units are also expected to set up "leading groups" to resolve the problem of long lines around the clock, said the report.
Sinopec and the Hong Kong-listed PetroChina Co vowed earlier this month that they will delay maintenance of oil-processing plants and urge their refineries to exceed planned output to boost fuel output and ease shortages.
The promises came after the National Development and Reform Commission, the nation's top economic planning body, summoned executives from the two refiners to discuss ways to ensure the supply of oil products after a fuel price hike at the beginning of this month
China, the world's largest oil user after the United States, unexpectedly increased fuel prices by as much as 10 percent effective November 1 in what it said was an "urgent step" to boost market supply.
Prices of gasoline, diesel and jet fuel rose 500 yuan (US$67) a metric ton to temper consumption and help refiners cover costs.
China controls fuel prices to limit their impact on inflation. Domestic refineries have been losing money from fuel sales after crude oil costs soared.
Benchmark crude prices reached US$94.64 a barrel on the New York Mercantile Exchange yesterday.
(Shanghai Daily November 20, 2007)