China cancels diesel export fearing inflation

Posted By: Religare
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China cancels diesel export fearing inflation
Caught by an unparallel upsurge of inflation, China is striving to warrant domestic supply and stabilise fuel costs by putting a halt to the due shipments of diesel and refined oil products today.

Except Macau and Hong Kong, the country is expected to levy strict restrictions on the exports of refined oil products while that of diesel would be temporarily stopped, as told by the National Development and Reform Commission.

Even the big planners in Chinese Economy insisted oil producers to understand the importance of refined oil supply for keeping pace with nation"s social and economic growth and thus "maintain full capacity operation" to increase output. The commission also showed strong determination to crack down on artificial scarcity and unauthorised price hikes.

From last October, the prices of petrol and diesel have quadrupled in China leading to a steep rise in global crude oil prices and outraged concerns about politically-sensitive inflation in the world's second biggest economy.

In last four months, the country used 78.33 million tonnes of refined oil locally and about 78.33 million tonnes for export to countries like United States, Japan, France and Singapore.

Last month, hundreds of transporters went on strike at port facilities in Shanghai over rising fuel costs, prompting a stiff police response. Seemingly disappointed with fifth such consecutive hike, China"s central bank is revising its reserve requirement ratio so that commercial banks can lend limited amounts, by 0.50 percentage points, reported to be effective from 18th May.

Read more about: china, inflation, diesel, investment
Story first published: Monday, May 16, 2011, 9:30 [IST]
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