Mon, Nov 26, 2007 - Page 12 News List

Beijing seeks to ensure fuel supply

AMID THE SQUEEZE The world's second-largest oil consumer says it will increase routine checks at filling stations and deal strictly with any untoward activity


China has ordered increased monitoring to ensure steady fuel supplies, especially of diesel, that keeps the nation's exports moving to global markets.

The Commerce Ministry's order was made late Saturday amid a squeeze on supplies from Chinese refiners, who must pay more for imports but are restricted from raising pump prices by government policy.

An almost 10 percent rise in the price of diesel and gasoline on Nov. 1 helped ease the pinch, although fuel is so scarce in the southern manufacturing base that filling stations continue to ration supplies, requiring truckers to sometimes wait for hours to fill up.

The ministry notice, which was posted on its Web site, included no concrete supply targets -- but it further registers the ministry's concern and puts managers on notice to anticipate and steer clear of shocks.

It ordered additional scrutiny over reserves, distribution and pricing, with mangers ordered to ferret out and prevent illegal stockpiling and price gouging.

"Closely follow movements in the market for petroleum products and perform well the work of monitoring and early warning," the notice said.

The vast majority of China's exports move from factory to port on the back of diesel-fueled container trucks that clog highways along the southeastern coast, especially Guangdong Province.

Gas station attendants reached by telephone in the area said supplies were stable, although sales restrictions remained for diesel, but not gasoline.

They said no price fluctuations had been reported.

"We are getting steady supplies, but there are still limits," said an attendant at the Guangzeng filling station who gave only his surname, In.

As an example, he said only one of the station's two underground supply tanks was being refilled with each new delivery of diesel.

China, the world's second-largest oil consumer after the US, imported 3.4 million barrels of diesel over the first nine months of this year, a 46.5 percent increase over the same period last year.

Last week, its largest oil company, China National Petroleum Corp (中國石油天然氣), said it would import 750,000 barrels of diesel this month alone to ease shortages.

The ministry notice said authorities would increase routine checks on filling stations and other distribution points and "strictly deal with illegal pricing, product adulteration, shortchanging, hoarding, unlicensed business, and other behavior that disrupts market order," the notice said.

China's vulnerability to global resource price shocks has grown along with its startling economic surge, propelling the government and state enterprises into a global hunt to secure future supplies.

"Petroleum products are linked to the national economy and people's livelihood," the notice said.

"Their significance to national economy security cannot be understated," it said.

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