China Will Look To Coal, Gas Consumption To Offset Oil Prices

"China's overall crude oil consumption is about 8% or 9% of world consumption and per capita consumption is a little less," said Zheng Jingping, spokesman of the National Bureau of Statistics. "So we are affected (by high prices) but the degree that we are affected is limited," he said.

China had ample supplies of coal and natural gas which would be used to offset the high prices of oil and replace expensive crude imports, he said. "We can maintain coal consumption to make up to 60% to 70% of all our energy consumption and as we also have ample reserves of natural gas, this too can be used to a certain extent to offset the impact of high prices."

"China imports about 40% of its oil so of course we are affected, especially the industries that are high consumers of oil or that process oil products," Zheng said.

"During the first quarter of the year, our gasoline (petrol) refineries lost 9.8 billion yuan (US$1.2 billion)." China keeps its petrol prices at the pump artificially low in an effort to encourage car purchases and so support a major industry but refiners then have to be subsidized to make up the difference with oil paid for at market rates.

Copyright Agence France-Presse, 2006

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