Last year was remarkably unusual for the global oil market, where crude prices soared to the historic high of over US$147 a barrel in July but collapsed to below US$40 in December amid the economic meltdown.
In China's energy sector, reforms have also been pushed forward in areas ranging from administration to pricing mechanisms, making the year of 2008 one of the most unusual in history.
The new fuel pricing system is providing more freedom in pricing and has already triggered competition between fuel suppliers. Across the nation, Sinopec and PetroChina are now cutting prices one after another to compete for customers ?? another by-product of the slowing demand.
This would have been hard to imagine at the start of last year when many drivers had nowhere to get their tanks filled, as rising oil rates and state-capped gasoline and diesel prices forced loss-making domestic refiners to reduce their fuel processing.
Sinopec's general manager, Su Shulin, has predicted that in 2009 the domestic fuel market could turn to a buyer's market from a long-time seller's one.
For oil firms, in particular Sinopec, the top Asian refiner, the new pricing regime also means appropriate profit margins for its business.
But as the government has said it will still impose a ceiling when crude soars back to high levels, the real test for the new system has yet to come.
Today we look at the major happenings in China's oil industry last year as well as previewing earnings outlooks for the nation's top three oil companies for 2009.
Snow problems
Fuel and power supplies were disrupted in January in some areas in south China hit by snowstorms. State-owned oil firms Sinopec and PetroChina and power distribution companies stepped up efforts to combat the disasters with government coordination.
Opinion: Unlike previous shortages caused by supply and demand imbalances, these natural disasters provided new tests for China's capability to handle energy shortfalls in emergencies. This has provided experience for the future.
Pipeline under way
The construction of China's second West-East natural gas pipeline started in February. The pipeline will carry up to 30 billion cubic meters of gas a year from Turkmenistan in Central Asia to the south and east boards of China, spanning 14 provinces, from 2011 on. The length of the project will exceed 10,000 kilometers. Turkmenistan has agreed to supply gas to China for 30 years.
Opinion: This project will play a key role in meeting China's rising demand for the cleaner-burning fuel, ensuring energy security and benefiting people's life styles. Shanghai will be one of the beneficiaries.
