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Rumors of an energy-sector stimulus plan
By Wang Ying |
February 14, 2009, Saturday
|
Print Edition
Print Edition
CHINA, the world's second-biggest energy consumer, may approve a stimulus plan for the oil refining and petrochemicals sector next week to help spur the slowing economy, two industry officials said.
The proposal, which includes tax incentives and the acceleration of construction projects, has already been submitted to the State Council, two officials at the China Petroleum and Chemical Industry Association, who declined to be identified because of internal rules, told Bloomberg News yesterday.
The Cabinet will decide on the final plan, said the officials, one of whom participated in the drafting of the proposal.
China's economy, the world's third-largest, expanded at the slowest pace in seven years in the fourth quarter last year, cutting consumption of fuels and petrochemicals. The plan for the energy sector will add to the 4-trillion-yuan (US$586 billion) of spending that the government announced in November to support the economy amid the global recession.
"Demand should start to pick up in March or April as the stimulus measures take effect," Wang Aochao, an analyst at UOB Kay Hian Ltd in Shanghai said.
The draft plan proposed that the government take advantage of low prices and stockpile oil products to help reduce an oversupply in the domestic market, one of the officials said.
It was proposed that the state build a reserve of 10 million tons of fuels by 2011, he said. The officials didn't give the value of the stimulus package.
The proposal, which includes tax incentives and the acceleration of construction projects, has already been submitted to the State Council, two officials at the China Petroleum and Chemical Industry Association, who declined to be identified because of internal rules, told Bloomberg News yesterday.
The Cabinet will decide on the final plan, said the officials, one of whom participated in the drafting of the proposal.
China's economy, the world's third-largest, expanded at the slowest pace in seven years in the fourth quarter last year, cutting consumption of fuels and petrochemicals. The plan for the energy sector will add to the 4-trillion-yuan (US$586 billion) of spending that the government announced in November to support the economy amid the global recession.
"Demand should start to pick up in March or April as the stimulus measures take effect," Wang Aochao, an analyst at UOB Kay Hian Ltd in Shanghai said.
The draft plan proposed that the government take advantage of low prices and stockpile oil products to help reduce an oversupply in the domestic market, one of the officials said.
It was proposed that the state build a reserve of 10 million tons of fuels by 2011, he said. The officials didn't give the value of the stimulus package.
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