Mon, Feb 04, 2013 - Page 5 News List

China’s oil giants take a choke-hold on power

Reuters, BEIJING

Yet the ministry still lacks the authority to force big state-owned enterprises and local governments to toe the line.

Excessive pollution levels have already prompted the Beijing government to roll out a series of temporary emergency measures such as shutting down 103 heavily polluting factories and taking 30 percent of government vehicles off roads, but the capital’s air has remained hazardous.

It remains unclear whether Xi will restrain the influence of the oil firms, but with public anger rising, and with a normally compliant media joining in the calls for action, political pressure is growing.

The problem for oil firms such as PetroChina and Sinopec is that central planners set prices at the pump, even when global energy costs remain high.

Tang said both CNPC and Sinopec have told the ministry that they would have supplied the fuels “if they had gotten a reasonable price.”

With no supply of cleaner diesel fuel, Beijing had to delay the implementation of the China IV emission standard for diesel trucks and buses twice — first in 2011 and then last year, when it was extended to July this year.

The new standard aims to cut emissions of particulate matter and nitrogen oxides — two key components of urban smog — from trucks and buses by 80 percent and 30 percent respectively, said Vance Wagner, a senior researcher at the International Council on Clean Transportation.

In response, China’s Ministry of Finance has stepped in to negotiate preferential tax policies with the oil firms to help offset the higher costs of producing cleaner diesel fuel, people close to the environment ministry said.

Chinese media reported last week that new cleaner diesel fuel standards, similar to Euro IV standards that restrict sulfur content, could be issued soon in addition to the existing emissions standards.

However, even the new requirements,, could give oil companies a two-year window for full compliance.

Without intervention at a higher level, the delays are likely to go on.

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