China announced Tuesday the setting up of a national oil reserve
center, the top economic planning agency
confirmed.
China started a state strategic oil reserve base program in 2004
as a way to offset oil supply risks and reduce the impact of
fluctuating energy prices worldwide on China's domestic market of
refined oil.
With the approval of the government, the center was officially
launched Tuesday, said the National Development and Reform
Commission, which oversees a wide-range of social and economic
affairs, including energy.
The center, the administrative body of the country's national
oil reserve system, takes responsibility for building and making
use of the country's strategic oil reserves, the commission said in
a statement.
The commission said the center will also keep an eye on the
movement of demand and supply of both domestic and international
oil markets.
The commission said the country has decided to establish four
strategic oil reserve bases in Dalian, Qingdao, Ningbo and
Zhoushan, respectively. All of them are on the coast. The first one
in Ningbo, eastern China's Zhejiang Province, has started to stock
up on oil.
They are designed to maintain strategic oil reserves of an
equivalent to 30 days of imports, or about 10 million tonnes.
NDRC official Hu Weiping said strategic oil reserves will be
used in case of emergency or when the country is suddenly in short
supply. "Never in any circumstances will China use its strategic
oil reserves to rig oil prices," he said.
Short of financial resources, China can not expand its strategic
oil reserves very quickly. Meanwhile, with high and fluctuating oil
prices in the international market, the country's increment of oil
reserves is certain to have an impact on the further movement of
oil prices, NDRC vice-minister Chen Demin said previously.
China's strategic oil reserve stood at two million to three
million tonnes, and would be expanded to about 12 million tonnes by
2010, said Chen.
The launch of the national oil reserve center is meant to beef
up the country's energy security and solve such problems as
shortage of processed oil supply, Niu Li, an analyst with the State
Information Center, told Xinhua.
China's eastern and southern areas have seen another serious and
sudden shortage of fuel and diesel supplies since December this
year.
According to a statement from the third China-U.S. Strategic
Economic Dialogue, the United States and China agreed to strengthen
cooperation on the building and management of strategic oil
stocks.
The statement said, "Coordinated use of strategic petroleum
reserves increases energy security for net oil-importing countries
during times of significant supply disruption."
Imports accounted for 66 percent of U.S. domestic petroleum use
last year. The figure for China, which became a net importer of oil
during the 1990s as its economy took off, was 47 percent.
(Xinhua News Agency December 18, 2007)
