Deng Yusong, a researcher with the Development Research Center of the State Council, said that abnormal needs boosted by below-cost prices of refined oil products controlled by the central government over concerns of the country's rising CPI is another major reason contributing to the country's surging oil consumption.

State ceiling on domestic oil products prices has led to both smuggling and cornering of oil products, said Shu.

According to Shu, reconstruction of the country's snow-hit south also increased the real demand for oil products.

China's crude oil output rose by 2.2 percent to 46.85 million tonnes in the first quarter.

The output of gasoline went up 7.0 percent from a year ago to 15.7 million tonnes, diesel, up 11.2 percent to 32.4 million tonnes, and kerosene, up 17.5 percent to 3.03 million tonnes, according to the National Bureau of Statistics.

China processed 84.6 million tonnes of crude oil in the first quarter, up 7.6 percent from a year ago. The growth rate was two percentage points higher than the first three months of last year.

China's net imports of crude oil was 44.95 million tonnes in the first quarter, up 14.9 percent, and net imports of oil products rose by 31.8 percent from a year ago to 5.47 million tonnes, according to General Administration of Customs.

China's imports of diesel in the first quarter surged over 600 percent to 1.66 million tonnes and the imports of gasoline, rose by nearly twice to 76,654 tonnes.

(Xinhua News Agency April 30, 2008)