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China fines oil firms for illegally propping up diesel prices

Tuesday, November 23, 2010 9:31 AM

BEIJING, Nov. 23, 2010 (Xinhua News Agency) -- China said on Tuesday it would punish six companies, including affiliates of the country's two oil giants, for selling diesel above the state-set prices, in an effort to ease the diesel shortage and keep soaring prices in check.

The companies, including Sinopec's (NYSE:SNP) units in Wuhan and Luoyang, and PetroChina's Wuhan unit, were selling diesel at prices as high as 8 percent above the government set price, according to a statement posted on the website of National Development and Reform Commission (NDRC), the country's top economic planner.

These companies also included local refineries and oil dealers in Shaanxi, Shandong and Jiangsu provinces and according to the NDRC, the acts have exacerbated the diesel shortage and disrupted market order.

The commission urged local authorities to seize the illicit revenue from above-ceiling sales and fine the companies up to five-times of their income.

To relieve domestic diesel shortages, both Sinopec and PetroChina are increasing diesel imports, while Sinopec said last week it had even suspended diesel exports.

According to customs statistics, China's diesel imports in October rose to 400,000 tonnes, surging 60 percent compared with that in September.

(Source: )
(Source: Quotemedia)


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