China's oil import growth continues to fall
Updated: 2005-11-20 09:11
China will import less oil and oil products in 2006 than previous years, an
official with the Ministry of Commerce (MOC) said recently.
Lu Jianhua, Director of Foreign Trade Department of the MOC, told the Asian
Business Forum held recently, that it is unfair to blame China for rising
international oil prices.
According to statistics, China imported 105 million tons of crude oil in the
first ten months of this year, rising 5.7 percent year on year, and 25.69
million tons of refined oil, down 16 percent from a year ago.
It is estimated that China will import 130 million tons of crude oil in 2005,
rising only six percent year on year. This means the rate of growth of oil
imports has dropped 30 percent, said Lu.
The price of crude oil on the New York Mercantile Exchange (NYMEX) closed at
56.35 dollars per barrel Thursday, it's lowest since July.
It is reasonable for the price of oil to fall and there's room for it to drop
even further, Lu predicted.
This summer the world saw crude oil prices hovering at 60 US dollars per
barrel and even surge to a record of 70 US dollars.
Such high oil prices can be attributed to financial speculation rather than
the normal market forces of supply and demand.
According to statistics released by BP this year, 2004 witnessed a growth in
global oil demand of 3.4 percent, which was lower than that year's growth in
production capacity of 4.5 percent. This indicates that China should not be
blamed for rising oil prices.
"The world's capacity to supply is still greater than the demand and that has
not changed," said Zhou Dadi, Director of the Research Institute of Energy,
National Development and Reform Commission (NDRC) at a forum on petroleum held
"So it is not valid to say that China's oil imports are the cause of rising
international oil prices," said Zhou.
In 2004, China accounted for 11 percent of that year's global energy output,
according to statistics of the NDRC. The country produced 1.956 billion tons of
coal. Adding its oil, natural gas, and other energy output, it produced a total
of 1.85 billion tons of primary energy in terms of standard coal.
China's primary energy consumption in 2004 was 1.97 billion tons of standard
coal equivalent and its domestic energy supply capacity reached as high as 94
percent, which is among the highest in the world.
In order to enhance China's security of oil supply it should try to reduce
its dependency on oil imports to about 30 percent and not exceed more than 50
percent, said Xu Shoubo, an academic of Chinese Academy of Engineering.
China imported 120 million tons of crude oil in 2004, accounting for 40
percent of its oil consumption.
The Chinese government says reducing the country's energy demand and
improving energy efficiency is extremely important.
In the proposal for the 11th Five Year Program, the blueprint for the
economic and social development of the country from 2006 to 2010 issued last
month, the government made clear the goal to reduce its per unit GDP energy
consumption by 20 percent at the end of 2010.
China will continue to make coal it main method of producing energy allowing
it to meet its energy demand from domestic sources, said the proposal.
Currently nearly 70 percent of China's energy demand is met by coal.
Petroleum accounts for just over 20 percent of its energy supply.
Developing new and renewable resources, improving the country's energy
efficiency and keeping its demand for imported oil at a moderate rate of growth
will sustain China's energy consumption, said Xu Shoubo.