With winter approaching, Beijing is seeing its diesel oil
supplies become tighter and tighter. Many local filling stations
are not allowed to provide as much diesel fuel oil as their
customers want. They must offer limited amounts of diesel to a
restricted range of customers. Some filling stations beyond the
fifth ring road, very far from downtown, have even been forced to
cancel providing this kind of fuel because no supplies are
available to them.
An anonymous employee with a state-owned filling station said
that the sales restrictions were not out of their choice but rather
came from mandatory orders from above. Another unnamed staff member
working at a Sinopec-owned fuel station speculated that the current
tight supplies of diesel oil resulted from artificial
manipulation.
But privately owned filling stations are in an even worse
situation because their oil supplies are gradually running out.
Some people have even begun to cry that the oil crisis has finally
arrived.
On October 30, a source inside Sinopec denied the existence of a
so-called "oil crisis" and revealed that Sinopec's refineries such
as Beijing Yanshan Petrochemical Co., Ltd. are in full production
mode. The source said that the current situation was created by
market supply and demand.?
Analysts agree. Wang Gang, an oil industry analyst from Great
Wall Securities, said that Sinopec, the major domestic provider of
oil products, is heavily relying on expensive imported crude oil,
accounting for 60 percent of the total amount of crude oil that it
needed last year. Due to the high costs of crude oil plus
additional refining costs, the more products the company outputs,
the larger the losses it suffers. Therefore, the firm has cut
production, causing diesel oil supplies shrink.
But as winter draws near industrial sectors such as mining,
transportation, construction and fishery are generating massive
demands for more diesel oil, said Li Yu, an analyst with industry
website www.oilboss.cn.
Some market analysts have even pointed out that China's two oil
giants, PetroChina and Sinopec, would continue to experience
hardships if the international oil prices continue to remain high
and if China does not take measures to adjust the prices of oil
products.
(China.org.cn by Pang Li, November 1, 2007)
