PetroChina to control fuel exports to ease shortages

BEIJING (Bloomberg) -- PetroChina Co. will extend its “strict control” on fuel exports into the second half of the year as China, the world’s fifth-biggest oil producer, seeks to ease a domestic gasoline and diesel shortage.

Fuel supplies will remain “tight” for the rest of 2008, President Zhou Jiping said in a statement on the parent company’s Web site. PetroChina, the nation’s biggest oil producer, will continue to import refined products and “optimize” operations to meet rising demand.

China, the world’s second-largest energy consumer, has ordered its oil producers to end a fuel shortage as some small, private refineries shut because of government caps on prices and high raw-material costs. The state increased gasoline and diesel prices in June for the first time this year to help refiners cover losses as global crude prices rose to records.

“The company will also try to ensure adequate natural-gas supplies to the Beijing Olympic Games and to gas-fired power plants in eastern China when consumption peaks during the summer,” Zhou said.

PetroChina may import record volumes of oil products this year to ease a shortfall, parent China National Petroleum Corp. said on June 28. The oil producer will run its refineries at full capacity and shorten maintenance periods, the parent said at the time.

-------------Rising imports

The nation’s diesel imports rose to 961,760 metric tons last month, the highest in at least five years, according to customs data. Gasoline purchases surged to 282,996 tons, with exports at 154,272 tons, the country remaining a net importer of the fuel for the second time.

China increased fuel imports for relief efforts after a 7.9-magnitude temblor struck Sichuan province on May 12. The government is also boosting stockpiles before the Beijing Olympics next month.

PetroChina plans to increase crude processing by 880,000 tons in the third quarter and boost fuel output by 580,000 tons from the year-earlier period, China National said last month.

Benchmark oil prices in New York are up 74 percent from a year ago and touched a record $147.27 a barrel on July 11. Crude oil for August delivery fell as much as 77 cents, or 0.6 percent, to $130.27 on the New York Mercantile Exchange.

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