CNPC charged with illegally selling crude oil pledges to rectify problem

China National Petroleum Corp, whose subsidiary illegally resold millions of metric tons of imported crude oil to other refineries for profit, vowed to actively cooperate with the investigation to rectify the issues.

The company will closely check its internal control system and further improve the company's crude oil trading system, it said on Thursday. The company's production and operation have not been affected so far, it said.

According to an investigation by a joint inspection team led by the State Council, China's Cabinet, a fuel oil company under CNPC had resold 179.5 million tons of crude oil to 115 independent refineries in China since June 2006, when the company first sold 400,000 tons of crude to Befar Group in Shandong province, under the name of blend fuel.

Authorities have punished the company and confiscated its illegal gains, Xinhua said. The punishment was not specified. It said leading officials of CNPC should also be held accountable for dereliction of duty.

The subsidiary had violated the country's crude oil product management regulations and industry policies, while disturbing the oil market and encouraging illegal independent refineries to blindly develop their capacity, the report said. It had also facilitated the illegal approval of local refinery projects, disturbed fair competition and led to the loss of government revenue.

Authorities have taken a tough stance on crude oil quota use and imports in recent years.

China's annual crude oil imports dropped to 513 million tons last year from 542 million tons in 2020, decreasing for the first time since 2001, according to the General Administration of Customs.