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Diesel supply asked to meet farm planting

(Agencies)
Updated: 2008-04-24 13:42

China's Ministry of Commerce has ordered already strained oil producers to increase output of diesel to meet heightened farm demand during spring planting.

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In an "urgent notice" issued on April 23, the Ministry told major domestic companies, including China National Petroleum Corp, China Petrochemical Corp and China National Offshore Oil Corp to prepare for a spike in diesel fuel demand as farmers plough and seed fields.

"With spring ploughing and planting...rural market demand for diesel oil will be vigorous," said the notice issued on the Ministry's website.

It told producers to "exert all efforts to ensure rural market crude oil demand for the key agricultural production period and for key-point regions."

As China grapples with strained oil supplies that have disrupted some commercial transport, it is also seeking to fight food price inflation by ensuring full harvests.

China's implied oil demand leapt 8 percent in March from a year earlier, the fastest rate in 19 months, as refiners boosted imports to stock up ahead of the Olympics, official data showed this week.

The country's oil demand rose 6.2 percent in the first quarter, aided by a tax rebate on imported fuels, which along with subsidies to top refiners has taken some of the sting from refining losses inflicted by the widening gap between soaring crude costs and low retail prices.