China's crude oil imports rose sharply last month in annualized terms because of the low base a year ago and rising demand from refiners after the government raised retail fuel prices.
The country imported 19 percent more oil - 12.39 million tons - in May, or 2.93 million barrels per day, year on year, according to data released by the General Administration of Customs yesterday.
However, last month's imports were only a moderate increase from that of April. China imported 12 million tons of crude in April, down 1.8 percent from a year earlier.
"It's mainly last May's low figure that contributes to the acute on-year rise, but we also believe that the government's move to raise gasoline and fuel prices also played a part," said Li Zhipeng, a Xiangcai Securities Co analyst.
The central government raised the prices of gasoline and diesel by more than 10 percent in May, the second time this year, to help the country's refining industry, which lost 9.8 billion yuan (US$1.2 billion) in the first quarter.
The market expects more price increases this year as analysts, including David Hurd at Deutsche Bank AG, said the two hikes in March and May were still not enough to cover refining losses of big firms like Sinopec Corp.
"Such expectation (of a price rise) would also give more reason for refiners to import crude oil," Li said. "Domestic production rose stably in China, so the main factor to affect imports is the change in domestic demand."
(Shanghai Daily June 13, 2006)
