PetroChina says demand, supply fuel diesel shortage

BEIJING, June 12 (Reuters) - Vigorous demand and relatively slow growth in supply have sparked more diesel shortages across China, a senior official with PetroChina (0857.HK)(601857.SS)(PTR.N) said on Thursday.

Though China's top oil firm sold 35.34 millIon tonnes of refined oil products in the local market in the first five months of this year, 8.6 percent higher than a year earlier, this was still not enough to meet domestic diesel demand, said Tian Jinghui, vice president of PetroChina's Refining and Marketing Company.

Tian did not provide the volume of diesel sold during the period or its percentage change over last year.

With independent refiners cutting production or halting operations due to losses caused by both state-set low fuel prices and soaring crude oil costs, fuel supply in the market has fallen more sharply than a year earlier, Tian said in an email release.

He said some domestic users have switched to diesel from imported fuel oil as the latter's import costs have increased to levels similar to domestic diesel prices, which are rigidly controlled by Beijing.

In addition, soaring international crude prices have fuelled expectations in the domestic market that fuel oil products supply could not be guaranteed if the crude rally persisted, said Tian.

Some refiners have begun to stockpile diesel in the hope of a price hike, and this led to even more shortages, he said. (Reporting by Jim Bai; Editing by Ben Tan)