China witnessed an astonishing 83.2-percent year-on-year slump
in crude exports in March, according to the General Administration
of Customs.
Crude oil imports last month, on the other hand, reached 13.9
million tons, up 8.8 percent year-on-year.
The trade pattern is set to continue for the rest of the year,
said Han Xuegong, a senior consultant with China National Petroleum
Company (CNPC).
"Although international crude price fluctuates at a fairly high
level, the cost of production within China is also increasing with
labor cost and raw material expenses on the rise. More importantly,
the ever-soaring local demand for fuel requires less exports from
the country. That's fundamentally why crude exports are
nosediving," Han said.
Crude exports last month were only 218,988 tons. February
exports were zero while January's stood at 300,000 tons.
Echoing Han, Cao Xiaoxi, chief engineer of Sinopec's Economic
and Development Research Institute, predicted that crude exports
are set to fall this year because of the consistent national trade
policies discouraging the exports of crude and oil products.
China imposed temporary tariffs on 110 export items and cut
tariffs on 58 imported goods late last year. Crude was on both
lists. Crude exports carry a tariff of 5 percent.
"It's a long-term, clear policy to rein in crude and oil product
exports. It's in line with the national interest," Cao said.
Niu Li, an economist with the State Information Center
affiliated to China's top economic planner, the National
Development and Reform Commission, said while exports will fall,
rising local demand won't necessarily trigger more imports.
"There's no guarantee that oil imports will rise this year. It
depends on international oil prices and the actual local demand,"
the energy expert said. High global oil prices will increase energy
efficiency and promote energy conservation awareness, Niu said.
Oil imports may rise 10 percent this year compared with 14
percent in 2006 as government policies to boost energy conservation
bring down fuel consumption.
(China Daily April 25, 2007)