China repeats pledges on energy security, price reform

By Emma Graham-Harrison

BEIJING (Reuters) - China reiterated in an energy policy paper its commitment to boost supply security and price reforms while promoting greener growth, but Beijing shed little light on the new measures to achieve these goals.

China, the world's second-largest oil consumer, needs to arrange more long-term supply deals to reduce the last-minute scramble in the spot oil market, Beijing said in a policy paper titled "China's Energy Conditions and Policies."

China, which imports nearly half of its crude requirements, sources more than 60 percent of crude imports through term contracts with top exporters such as Saudi Arabia, Iran and Russia, state oil traders have said.

"China will, step by step, change the current situation of relying too heavily on spot trading of crude oil, encourage the signing of long-term supply contracts with foreign companies and promote the diversification of trading channels," the paper said.

It also repeated Beijing's commitment to liberalizing energy prices and the adoption of more fiscal measures to curb wasteful consumption, even though it has kept rigid price controls on fuels and electricity for fear for fanning high inflation.

"It will deepen the reform of energy prices to introduce a pricing mechanism favorable for energy conservation. It will put in force an evaluation and examination system in respect of energy conservation in fixed assets investment projects."

DIPLOMACY

China has generally been reluctant to discuss international energy politics, despite deals with states including Sudan and Iran, which Western nations have shunned. Beijing has said it seeks only business opportunities abroad.