The government raised domestic fuel prices twice in June, providing refiners an incentive to step up production. The price hikes on June 1 and June 30 lifted gasoline prices by a total of Yuan 1,000 per metric ton ($17 per barrel) and gasoil also by Yuan 1,000 per metric ton ($19.65 per barrel).
Domestic crude production in June, however, failed to keep pace with the rise in refinery runs, inching up 1.8% from a year ago to 15.71 million metric tons (3.83 million barrels per day).
Meanwhile, China's year-to-date oil demand is slightly below 2008 levels, as the strength in the second quarter 2009 (Q2) could not fully offset the slump in the first quarter (Q1).
Chinese oil demand in the first half of 2009, at 186.32 million metric tons, was 0.23% below the same period of 2008, Platts estimates.
"China appears to have decoupled itself from the world's economic malaise for now, with Beijing's Yuan 4 trillion stimulus package stoking domestic consumption and gross domestic product (GDP) growth rebounding to 7.9% in the second quarter from 6.1% in Q1," said Vandana Hari, Asia news director at Platts. "The new peak in Chinese oil processing rates in June was no doubt also helped by the government's new domestic fuel pricing formula in use this year, which aims to protect refiners on costs and margins. But there is plenty of skepticism by oil market observers that domestic consumption will keep China's engine running at the current pace in the coming months if its export markets continue to remain in the doldrums."
Platts calculates China's apparent or implied oil demand on the basis of crude throughput volumes at the domestic refineries and net oil product imports, as reported by the National Bureau of Statistics and Chinese customs.
The government releases data on imports, exports, domestic crude production and refinery throughput, but does not give official figures on the country's actual oil consumption or stockpiles.
