China facing calls to do more to stable oil supply
(AP)
Updated: 2006-03-11 14:28

BEIJING (AP) _ China should beef up its maritime oil transport capacity and cut back on exports of crude oil to help ensure stable supplies, officials said in reports published Saturday.

China's oil shipping capacity of 12 million deadweight tons lags far behind Japan's, at 37.5 million deadweight tons, and that of the United States, at 29 million deadweight tons, the official Xinhua News Agency reported.

To ensure minimum security, China should be able to transport at least half of its crude oil imports aboard Chinese vessels, Xinhua cited Meng Qinlin, managing director of Dalian Ocean Shipping Co., a subsidiary of China's state-owned COSCO Group, as saying.

Chinese ships carried only 9 percent of the 110 million tons of crude oil the country imported by sea in 2005. The remainder out of the total of 120 million tons was imported by train and pipeline.

About half of China's oil imports comes from the Middle East, 22 percent from Africa and 12 percent from Southeast Asia, the report said. It didn't say where the remainder came from.

China's tanker fleet is small, with only 18 very large crude carriers, the report quoted Meng as saying. Overall, the average age of the country's tankers is 18 years, six more than the global average.

Meng urged the government to provide tax breaks and subsidies to boost cooperation between oil companies and ship owners.

Meanwhile, a government adviser urged China's state-owned oil companies to cut back on oil exports to ensure adequate supplies at home.

China's oil products exports surged nearly 50 percent in the first half of 2005 over the year before, despite strong demand at home. Exports were encouraged by domestic price controls that kept prices for such products lower at home than on international markets.

The exports aggravated shortages in southern China's Guangdong province last August, said Guo Rongchang, a delegate from Guangdong to the government's top advisory body, the Chinese People's Political Consultative Conference.

"It means that while domestic consumers were suffering from the 'oil thirst,' our petroleum companies were selling a large quantity of their products abroad," Xinhua quoted Guo as saying.

Guo urged stronger government controls over oil companies and refiners to help stabilize the domestic oil products market.