(China Daily)
Updated: 2007-11-22 07:12

Suspending the export of refined oil products is a correct decision by the petroleum giants at this time, says an article in Procuratorators' Daily. The following is an excerpt:

China Petroleum & Chemical Corporation (Sinopec) and China National Petroleum Corporation (Petro China), the country's two biggest suppliers of petroleum and refined oil products, announced on Monday that they were suspending the export of refined oil products for a while because of the shortage of these products in the domestic market.

In recent years, the country has often been hit by a shortage of petroleum or related products. Some of the shortages were attributed to natural disasters, like typhoons, and some by price hikes on the international market.

In several instances, the shortage in the domestic market was caused by the huge export of these products. Considering the higher profits gained from exporting rather than selling domestically, it is easy to understand the decisions. However, the petroleum giants in China should not put themselves in the same position as other businesses.

Run by the State, they are monopoly players in the market. They control the whole business link from crude oil exploration to retail and distribution. Such a monopoly position guarantees profits.

Now that Sinopec and Petro China have decided to give more priority to demand in the domestic market, they have obviously realized their roles as State-owned enterprises. And although this decision might cause some loss in financial terms, it will definitely improve their business image, fulfill their social responsibility and boost public welfare.

(China Daily 11/22/2007 page10)