China to halt export of diesel
By Richard Fu |
May 14, 2011, Saturday
|
Print Edition
Print Edition
CHINA will suspend diesel exports during the peak summer months to avoid domestic shortages as the nation faces its biggest power shortfall since 2004.
The National Development and Reform Commission, the main planning body, has also asked oil companies to increase refinery output, accelerate project construction and increase imports of petrochemical feedstock.
The diesel export suspension will not apply to Hong Kong and Macau, the NDRC said. Sinopec, Asia's biggest refiner, last month said it had halted export of oil products and reduced supplies to Hong Kong and Macau.
"The current supply tightness for gasoline/diesel could lead to widespread shortages following the shutdowns of the private refineries," Mirae Asset Securities Gordon Kwan said in a statement.
Private refiners, which account for 10 percent of China's capacity, are typically vulnerable to high crude prices and capped fuel prices. State-owned Sinopec and PetroChina are required to run at full throttle to ensure supply and maintain social stability.
Power shortages have hurt parts of China well before summer sets in largely due to high coal prices and regulated electricity prices, reinforcing fears that further regional power rationing could badly affect manufacturing hubs in Guangdong and Jiangsu provinces.
This could potentially add up to 300,000 barrels per day of diesel demand in China, according to the International Energy Agency, as factories turn to diesel-powered generators. China's diesel output grew 9.8 percent from a year earlier to 13.95 million tons in April, or 3.44 million barrels per day.
The National Development and Reform Commission, the main planning body, has also asked oil companies to increase refinery output, accelerate project construction and increase imports of petrochemical feedstock.
The diesel export suspension will not apply to Hong Kong and Macau, the NDRC said. Sinopec, Asia's biggest refiner, last month said it had halted export of oil products and reduced supplies to Hong Kong and Macau.
"The current supply tightness for gasoline/diesel could lead to widespread shortages following the shutdowns of the private refineries," Mirae Asset Securities Gordon Kwan said in a statement.
Private refiners, which account for 10 percent of China's capacity, are typically vulnerable to high crude prices and capped fuel prices. State-owned Sinopec and PetroChina are required to run at full throttle to ensure supply and maintain social stability.
Power shortages have hurt parts of China well before summer sets in largely due to high coal prices and regulated electricity prices, reinforcing fears that further regional power rationing could badly affect manufacturing hubs in Guangdong and Jiangsu provinces.
This could potentially add up to 300,000 barrels per day of diesel demand in China, according to the International Energy Agency, as factories turn to diesel-powered generators. China's diesel output grew 9.8 percent from a year earlier to 13.95 million tons in April, or 3.44 million barrels per day.
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