China Oil Supply Disrupted As Refiners Abandon Independent Retailers
A decision by China's two major refiners tosuspend sales to independent service stations has had a major impact on the supply of oil products in some regions, according to a report by the Shanghai-based Oriental Morning Post. After the state economic planning agency, the National Development and Reform Commission, declined a request from Sinopec and the China National Petroleum Corporation (CNPC) to raise wholesale and retail prices in line with the rise in international crude oil costs, the two companies announced the suspension of deliveries to independent gas stations, giving priority to their own retail franchises during the peak summerperiod. Despite assurances by the two oil majors that this would nothave any significant impact on supply, severe shortages have already begun to emerge in cities in southern China's Guangdong province, according to local reports. An investigation conducted by the pricingbureau in the southeastern island province of Hainan earlier this week also revealed that many of the 200 independent retailers were facing closure as a result of supply shortages. Independent oil retailers have been forced to turn to regional refiners, concentratedin the northern provinces of Shaanxi and Shandong and unaffiliated with the two oil majors, the Oriental Morning Post said. Xiangshui Fumei Chemical Co., Ltd., founded in 1999, is specialized in aromatic acid, phenol,industrial auxiliaries, rubber chemical and additives, and etc.
