CNPC and Sinopec overhaul oil refineries; decline in supply seen

The oil refineries of China National Petroleum Corp. (CNPC) and those of China Petrochemical Corporation (Sinopec Group) will undergo overhauling from September to October. The overhaul is expected to lighten the domestic supply of oil products, especially diesel fuel. Since the second quarter of this year, the two oil giants put a clamp on diesel oil export to ensure continuous domestic supply. Both companies have also said that they are prepared to import diesel oil should the need arise, easing concerns over the stockpile which analysts say may not meet the domestic demand for 20 days. The refineries that will undergo overhauling are mostly those belonging to CNPC. Both oil companies raised the wholesale price of diesel oil in the first week of September, from 120 to 180 yuan per ton. Prices were further raised after the Mid-autumn Festival in mid-September, with mark-up ranging from 20 to 300 yuan a ton, prompting China’s top economic planning body, the National Development and Reform Commission (NDRC) to say that it will strictly control the export of refined oil. (September 16, 2011)