21 October 2008 17:00 [Source: ICIS news]
SINGAPORE (ICIS news)--Oil demand in China is expected to increase by 5% in 2008 to around 375m tonnes/year (7.5m bbl/day), said an industry analyst on Tuesday.
Shen Ping, general manager of petrochemical information service C1 Energy, said China oil demand was expected to grow at around 4.5%-5% annually during 2008-2010, down from 8% annual growth in the preceding six years.
Shen Ping, speaking at a satellite event at the APPEC 2008 conference in Singapore, said it was still too early, however, to assess the impact of the global financial crisis on ?xml:namespace>
With no major discoveries of crude made in recent years and disappointing levels of output growth from existing fields, China – the second largest oil consumer in the world – is set to become more reliant on imports of oil.
Shen Ping said that China’s crude imports are set to rise by 10% in 2008 and will approach 180m tonnes/year, or around 48% of total requirements.
The larger volume of imports will be required to meet the growth in domestic refining capacity and the need to build up
In 2008 alone, she added, some 1.3m bbl/day of extra capacity is scheduled to come on-stream.
Shen Ping said the main area of demand growth in
Gasoil demand, which accounts for 46% of
Gasoline demand is set to increase by 8m tonnes/year, which is a net increase of 14% in 2008, buoyed by growing car ownership, said Shen ping. However, she added that demand for fuel oil, bitumen and LPG is expected to shrink by around 7%-8%.
China's demand for both gasoline and gasoil in 2008 was also boosted by government moves to increase stocks ahead of the Olympics, she said. In 2008, China became a net importer of gasoline for the first time.
She said she expected
Boosted by increased production and demand in
The Chinese government still controls pricing for distillates, which are set significantly lower than their international market values, with price changes lagging those in the open market.
Price controls have served to protect domestic consumers from the sharp rise in global gasoil prices earlier this year. But the recent sharp falls in gasoil prices have yet to be passed on to the domestic market, said Shen Ping.
Fuel oil demand in
LPG demand in
As a result of slackening demand and Chinese refineries producing more LPG, there will be a 30% cut in imports to around 2.8m tonnes this year, Shen Ping said.
Shen Ping said she believed that the Chinese government is slowly loosening its controls on the domestic energy market and creating a more free market approach. She highlighted recent import tax cuts, such as the abolition of government rebates for oil product exports.
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