According to customs statistics, China imported 145.18 million tons of crude oil in 2006 and imported 159.28 million tons in 2007. The figure for 2008 is estimated to be 170 million tons. If the international crude oil price keeps climbing like it has done in the first six months of the year, the huge oil import alone would cost China a big fortune.
Why is China so thirsty for oil? An important element is the dramatic growth of private cars. Between 1996 and 2006, the private cars rose from 2.9 million to 23.3 million and the net growth in 2006 was 4.85 million.
So many private cars have become a source of inflexible demand for gasoline.
Therefore, it is natural for people to wonder why so many people decided to own a car. Admittedly, some have better income to support their consumption and some find the automobiles are less expensive thanks to the development of the automobile manufacturing industry.
But more importantly, it is because many consumers do not consider the cost of using automobiles, because that cost could be negligible because of the low gasoline price.
To promote sustainable economic development, it is necessary to adjust the domestic oil consumption through price change. The individual demand to refined oil products not only weighs significantly upon the balance between the demand and supply within the Chinese market, but also influences the international oil price.
On the day China released its oil price hike, the crude oil future traded on the New York Mercantile Exchange dropped more than $4 per barrel. After that, the price keeps climbing again. One of the reasons for the latest rise is that the Chinese oil price was not raised to a reasonable level, and the international market expects more rises in the future.
