Posted on 09/19/2007 4:19:16 PM PDT by shrinkermd
BEIJING, Sept 19 (Reuters) - China's move to freeze prices of commodities under state control, including oil products, will sustain robust demand despite record-high crude, tightening supplies and inflame refining losses, industry officials said.
Beijing's announcement on Wednesday not to raise prices that it controls for the rest of 2007 amid mounting fears over inflation also threatened to force the shutdown of independent small refineries that supply 15 percent of China's oil market.
With U.S. crude (CLc1: Quote, Profile, Research) above $82 a barrel, China's domestic fuel price freeze will lead to greater losses at all its refineries.
Beijing last raised pump prices for gasoline and diesel in May last year, before tweaking gasoline rates lower in January and has since kept prices unchanged, shielding consumers from a more than $10 spike in global oil markets.
State refiners Sinopec Corp (0386.HK: Quote, Profile, Research) and PetroChina (0857.HK: Quote, Profile, Research), which would see refining margins plunging deeper into the red, may be enticed to cut output or raise fuel exports in coming months, or both, to salvage their bottom lines.
(Excerpt) Read more at uk.reuters.com ...
Shortages soon?
Communists are universally stupid. If they knew better, they wouldn’t be communists.
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