Sinopec to Boost Diesel Exports as Local Demand Falls

By Wang Ying

March 3 (Bloomberg) -- China Petroleum & Chemical Corp., Asia’s biggest refiner, plans to boost exports of diesel after domestic demand of the fuel dropped 30 percent in January.

China’s so-called apparent consumption of oil products, including diesel, fell 16.6 percent in January, China Petrochemical Corp., the parent of China Petroleum, said in a statement in its in-house newsletter today, without saying if the comparison is with the year-earlier period.

The world’s second-biggest energy user has been exporting diesel since December after a five-month halt as the domestic economy expanded at the slowest pace in seven years in the fourth quarter. The nation’s net crude-oil imports declined to the lowest level in more than a year in January, according to calculations based on government data released last month.

“Diesel demand fell mainly because manufacturers shut plants and cut production due to declining export orders,” Gong Jinshuang, an oil market analyst with China National Petroleum Corp., the country’s biggest oil producer, said by phone in Beijing today.

China’s oil demand will grow at a “noticeably lower rate” this year, the company said Feb. 10.

Sinopec, as China Petroleum is known, will increase gasoline production because supplies remain “relatively insufficient,” China Petrochemical said today. Gasoline use rose 8.4 percent in January, it said.

Sinopec’s refineries boosted gasoline supplies to its sales units by 150,000 metric tons in mid-February, it said, without giving details.

“China’s gasoline demand remains relatively strong because family use of automobiles didn’t fall,” said Gong.

Sinopec told its refineries to increase gasoline production last month after inventories fell and demand rose, according to a notice sent to provincial plants. Sinopec’s 30 refineries supply more than half of China’s fuel demand.

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