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Advisor Demands Chinese Oil Giants Cut Exports to Stabilize Domestic Supply

Posted on: Saturday, 11 March 2006, 09:00 CST

Advisor demands Chinese oil giants cut exports to stabilize domestic supply

BEIJING, March 10 (Xinhua) -- A Chinese political advisor has demanded the country's leading petroleum companies cut their oil exports to stabilize domestic market when there is a shortage of supply.

Citing the two-month-long "oil thirst" which haunted South China's booming province of Guangdong last year as an example, Guo Rongchang, a member of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC), the country's top advisory body, said that some of the country's monopoly sectors are hurting public interests for their own profits.

"Customs statistics showed that in the first six months last year, China exported 7.59 million tons of oil products, a year-on- year increase of 48.6 percent. It means that while domestic consumers were suffering from the 'oil thirst,' our petroleum companies were selling a large quantity of their products abroad," said Guo on the sidelines of the ongoing annual full session of the advisory body.

According to Guo's analysis, there might be two reasons for the oil companies' increase of exports. One is that domestic oil price hike was slower than that on the world market, the other is that the companies had misjudged the development trends of world oil price, with the hope of buying back oil when prices started to fall.

"However, world oil prices had kept climbing up throughout 2005, and now the entire Chinese society is paying the price for the wrong decision-making of the oil companies," said Guo.

Nevertheless, Guo said, the oil giants have turned out to be the biggest winners of the country's "oil thirst," obviously because of their monopoly status.

Statistics showed that in 2004, PetroChina and Sinopec, two leading oil producers of the country, grabbed combined profits of more than 200 billion yuan (25 billion U.S. dollars). In the first half of 2005, PetroChina recorded a profit of 102.9 billion yuan ( 12.86 billion dollars), said Guo.

"There is nothing to blame when a company seeks maximum profits in its business operations," said the lawmaker. "However, as state- controlled enterprises which exercise a complete monopoly of the oil sector, the Chinese petroleum companies must also take into account the interests of the country and the people."

When there are sharp fluctuations on the world market, it is the unshirkable responsibility of the monopoly companies to take action to stabilize the domestic market, said Guo, adding that the Chinese oil giants have failed to perform their public obligations properly.

To avoid the recurrence of such "oil thirst" or unexpected shortage of other energies and resources such as electricity and coal, Guo said, the country must carry out more effective supervision over and impose stricter restrictions on the monopoly sector.

"The excessive pursuit of profits and other egoistic activities by the monopoly companies must not be indulged," he warned.

Source: Xinhua News Agency - CEIS

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