Oil imports up as prices, demand rise
(Shenzhen Daily/Agencies)
Updated: 2005-10-12 11:45

China's crude oil import bill may rise 29 percent this year because of higher global prices and increasing fuel demand in the world's fastest-growing major economy, figures from the commerce ministry indicate.

China may spend US$10 billion more importing oil as shipments of the fuel reach about 140 million metric tons, the Beijing-based ministry said in a statement Monday. The largest oil user after the United States, China imported 122.7 million tons of oil last year at a cost of US$33.9 billion, according to customs data.

"International oil prices have remained at high levels and may rise further," the ministry said. "Rising oil prices may bring some disadvantages to the nation's economy. We're using more foreign exchange to pay for the oil."

Record oil prices are having some negative impact on China's economy, the country's top planning body said Sept. 22. Farmers are the first to feel the effects, while changes are being considered to the system used to set gasoline and diesel prices, which is showing some faults, the National Development and Reform Commission said.

China spent an average US$56 a barrel to import oil in August, an increase of 44.6 percent from a year earlier, according to the statement from the ministry. That was the highest monthly average this year.

Higher global oil prices are increasing costs for Chinese fuel manufacturers, chemicals producers and transportation companies, the ministry said.

At the same time, increased demand is causing the supply of energy prices to be tight, it said.

China is encouraging domestic companies to secure oil and gas supplies locally and abroad as energy prices reach all-time highs.

Oil rose to a record US$70.85 a barrel on the New York Mercantile Exchange on Aug. 30. Oil for November delivery was at US$61.84 a barrel in after-hours electronic trading in Beijing on Monday. Prices are up 16 percent from a year ago.