THE consumption of oil products is expected to continue strongly in the second half of this year, despite the government's moves to cool down the economy, analysts say.
Full-year demands for refined oil products – including gasoline, diesel and kerosene – will grow by more than 10% year-on-year to over 146 million tons, making China one of the most dynamic markets in the world, analysts say.
The estimated growth rate is higher than the 8.2% in 2003, according to Gong Jingshuan, an expert with the consultant institute of China National Petroleum Corp, the nation's largest oil producer.
The strong demand, especially driven by surging consumption from electricity and transportation sectors, is making refineries run almost at full capacity to keep up with the demand.
In the first five months, the consumption of refined oil products all surged by more than 20% year-on-year.
The robust demand growth has happened on the back of China's roaring economy with rampant production expansion in energy-intensive industries.
In particular, widespread power shortages have forced many factories to buy diesel-fuelled generators to produce electricity. This has made diesel consumption and imports surge, making China a net importer of diesel for the first time since 1998.
“The power shortage, the buying spree in cars and the bottleneck in transportation have become major forces driving up oil consumption,” said Liu Gu, an analyst with Guotai Jun'an Securities (Hong Kong).
But analysts said they do not expect the 20% growth rate will continue. They said the growth in the first five months had been exaggerated since it was based on the low figures of the same period of last year when the SARS outbreak hit oil consumption badly.
The analysts expect demand for oil will grow about 10% in the second half. – People's Daily