I know this is not bottled water, but I wonder what is going on to ensure they have enough ??
China's Olympic-size oil fears
SHAWN McCARTHY
Tuesday, May 13, 2008
OTTAWA — Worried about embarrassing shortages during the summer Olympics, The Chinese government is adopting a range of measures — worth as much as $87-billion (U.S.) — to ensure continued fuel supplies during the games, the International Energy Agency says.
In its monthly market report, the Paris-based IEA said China has faced ongoing shortages of both electricity and transportation fuels as a result of booming overall demand, distorted markets and a lack of transportation capacity.
But Beijing is determined that its moment on the world stage this summer won't be marred by energy glitches.
“Adamant that the domestic oil product market must be well supplied ahead of the Olympic Games ... China's government has adopted a new series of measures to deal with potential shortages,” said the agency, which advises industrialized nations on energy issues.
The total value of the subsidies would be around $87-billion (U.S.) per year, but given that 52 per cent of the country's crude is produced domestically, the net subsidy drops to $45-billion — still worth 5 per cent of the government's revenues.
China is not the only nation that is subsidizing energy consumption to shield its citizens from the inflationary impact of $126 (U.S.) a barrel crude prices. The IEA said subsidies in the developing world — particularly China, India and the Middle East — are propping up demand, and, perversely, contributing to record high crude prices.
Driven by exceptional economic growth, China is expected to see its demand for petroleum products rise 5 per cent this year to 7.9-million barrels per day, after a similar increase last year. In the past two years, China has boosted its demand by 700,000 barrels of oil per day.
But its state-owned refiners, PetroChina and Sinopec, are experiencing major losses as a result of buying crude at world prices and selling into a market where retail prices are capped. And that squeeze has contributed to shortage of petroleum products in the country.
Last month, the government said it would reimburse the two companies for their losses on a monthly basis. For the three months ending June 30, the government will also refund a 17-per-cent value added tax paid by refiners on imported oil. And it has ordered wholesalers to hold stocks equivalent to 15 days of sales.
Despite growth in demand from China and the Middle East, the IEA downgraded its demand forecast again this month, saying record prices and a slowdown in advanced economies are having an impact in industrialized economies.
The agency, which cut its forecast of global oil demand for the fourth consecutive month, now expects the world to consume 86.8-million barrels of crude per day in 2008, down 390,000 barrels from its previous estimate.
“While consumers may be adjusting to high oil prices, the full impact of current high oil prices in excess of 120 dollars per barrel, if sustained, has yet to be factored into either behaviour or forecasts,” it said.
© The Globe and Mail
http://www.globeinvestor.com/servlet/story/RTGAM.20080513.wchinaoil0513/GIStory/
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