OPINION> Commentary
Crackdown on hoarding of oil
(China Daily)
Updated: 2008-12-01 07:37

The government should take measures to prevent oil wholesalers from hoarding oil in the time of fuel tax reform, says an article on the website of Xinhua News Agency. The following is an excerpt:

After the State Council decided to solicit suggestions from the public on the reform of oil pricing and fuel tax reform, car owners in Guangdong province have reportedly used buckets to store oil in fear of fuel tax-spiked oil price rise.

The storage of oil by car owners will not affect the market too much. But if a good many oil wholesalers and middlemen also capitalize on the time gap before the fuel tax reform to hoard oil, it will pose a great threat to the market. Several things must be done as soon as possible:

First, the government should release the fuel tax scheme to the public in a timely manner so that consumers can be better prepared for the changed market situation.

Second, the oil price can be lowered first step by step before the official launch of fuel tax reform. If this is done, the wholesalers may not get the chance to hoard oil, while car owners can have the benefit.

Third, regulatory measures targeted at the possibility of wholesalers hoarding oil should be put in place to crack down on malicious market practices.

(China Daily 12/01/2008 page4)