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Domestic oil producers urged to increase supplies

(Xinhua)
Updated: 2008-06-30 21:55

Ten days after the Chinese government raised fuel prices, Vice Premier Li Keqiang has urged domestic oil producers to increase supplies and asked local governments to deliver subsidies to affected sectors and people.

"Increasing supplies of fuels such as petroleum and coal is vital to the steady development of the national economy and daily life," Li said during a visit to Langfang and Cangzhou cities, northern Hebei Province.

Li made the tour to research energy production and supply and to ascertain how affected sectors and people have reacted to the price rise.

On Sunday, Li visited PetroChina Huabei Oilfield Company, Huabei Petrochemical Company, two local pump stations at Gu'an County and Bazhou City, rural bus stations, a supermarket in Renqiu City, as well as farmers, urban low-income families and taxi drivers.

Local oil producers told Li they had been running at full capacity to increase supplies after retail fuel prices were lifted.

Li asked centrally-administered companies such as China National Petroleum Corporation and China Petrochemical Corporation as well as local producers to "dig deep into their potential" to substantially increase oil production and supplies.

He also ordered local governments to deliver subsidies to farmers, the fishery and forestry sectors, low-income families, the public transport sector and taxi drivers as soon as possible, and urged them to step up monitoring of illegal price rises.

The government raised the benchmark retail price of gasoline by 16 percent and diesel 18 percent on June 20, meaning mark-ups of 0.8 yuan per liter of gasoline and 0.92 yuan per liter of diesel at filling stations.

Before the rise, soaring world crude prices had pinched domestic oil refiners, which suffered losses because of state-controlled, below-cost fuel prices and some halted or suspended production to avoid further losses.

Short supply has led to long queues of vehicles at service stations in some parts of the country.