Beijing: China will ask its oil firms to speed up building commercial oil reserves as one of the ways to cope with turbulence in the oil market, an official with the ministry of commerce said on Tuesday.
“The recent fluctuations in oil supply and demand have taught us a lesson. We will work with oil firms to accelerate pushing forward the establishment and formation of commercial reserve system,” said Wang Xiaochuan, deputy director-general of the commerce reform and development department under the ministry.
Wang did not say if the storage system would include both crude oil and refined oil products and how it would work.
“As one of our focus in the near future, we will also strengthen managing and monitoring of the oil market,” Wang told an industry conference in Beijing.
China has been anxious to avoid any oil shortages in the run-up to the summer Olympics. But worsening fuel shortfalls have been reported in recent weeks in a variety of places including the capital, Beijing, as well as the financial hub of Shanghai.
Beijing asked its oil majors to ensure steady fuel supply to the domestic market and the latter pledged to boost production and imports despite hefty losses caused by soaring international crude oil and fuel costs and low state-set retail prices.
The commerce ministry required wholesalers of refined oil products to maintain fuel stocks equivalent to at least 15 days of sales from 1 May 2008.
A draft energy legislation, which has yet to be submitted to the National People’s Congress, China’s rubberstamp congress, also requires oil firms to build their own crude oil reserves to supplement a government-owned strategic inventory.