PetroChina, the country’s biggest oil and gas refiner, said on Friday it expects domestic fuel demand to rise despite the effects of China’s Covid-19 surge.
Executives at listed PetroChina said the anti-pandemic measures have led to higher product inventory compared with the start of the year.
“For the whole year of 2022, China’s economic growth will remain in a reasonable range, so we expect demand of refined oil products to stay higher than last year,” Wang Hua, a PetroChina finance director, told a briefing.
The company has sought to expand marketing, adjust refining capacity and utilisation rates, and arrange exports to trim the stockpile, the company said.
“With the improvement of the Covid-19 situation, refined product inventory is now showing a downturn,” said Ren Lixin, vice president of PetroChina.
No Plans for Russian Oil
Chai Shouping, the secretary of the company’s board, told analysts and media the group had no plans to buy discounted oil and gas from Russia.
Reuters reported that traders are deploying smaller, costlier vessels to ship displaced Russian oil from European ports to China, following a wide discount of Russian Urals against benchmark dated Brent.
Chai also expected PetroChina’s prices for domestic sales of natural gas in 2022 to exceed those of 2021, to offset expected losses in imported business as global gas prices surge.
PetroChina’s first-quarter profit from gas imports stood at 3.47 billion yuan ($519.44 million), as it brought in 21.2 billion cubic metres of natural gas, but it expects a significant increase of import costs in coming quarters.
Tough curbs on movement from early March in Chinese regions, such as the financial hub of Shanghai, have shut down industrial plants and dented demand for refined oil products.
- Reuters, with additional editing by George Russell