China's oil consumption likely to reach 350 million tons in 2007

High oil prices have impacted the nation's energy budget, said Jiang Xinmin, an expert with the Energy Institute under the State Development and Reform Commission (NDRC), adding that the country might replace oil with gas in some areas. Jiang said domestic oil production was increasing at around 1.5% a year, whereas oil consumption had jumped by about 8% a year since 2002, compelling China to import more.

As recently as ten years ago, he said, the country had been a net oil exporter but in 2006, nearly 50% of China's oil consumption was imported from abroad. International oil prices have risen from $25 per barrel in 2003 to $70 these days. “The unrest in the Middle East adds to oil price uncertainties in the global market,” said Jiang. Despite the high price of crude, production in China's large oil refineries has scarcely increased because petrochemical companies are struggling to deal with rising production costs, said the expert.

In 2006, China imported 139 million tons of crude oil, up 17% on 2005. Imports accounted for 47% of the country's consumption. Industry observers have warned China will likely need to import more than 50% of its petroleum needs in a year or two. (english.people.com.cn)