China's crude oil imports are expected to register a stagnant year-on-year growth of 1.2 percent in 2008, surprising some market observers who thought the government would take advantage of low world oil prices to increase reserves.

China National Petroleum Corporation, China's largest oil company, published the estimate on its website Wednesday, saying China will import 189 million tons of crude oil in 2008, up 1.2 percent from 2007.

That growth rate is down sharply from 14.7 percent in 2007 and 14.5 percent in 2006. The global price of oil has plummeted from July's US$147 per barrel to this month's average of US$40 per barrel.

China imported 164.5 million tons of crude oil as of the end of November, up 9.5 percent year-on-year, according to China Customs. The growth rate during the first 10 months this year stood at 10.6 percent.

However, China only imported 13.36 million tons of crude oil in November, down 1.86 percent year-on-year. And compared with October, the amount decreased by 17.3 percent.

The trend, according to analysts, is likely to continue into the middle of next year.

Guo Haitao, assistant director of Research Center for Energy Strategy, said ample crude oil reserves and sluggish oil consumption have spared little room for further import growth in spite of the low prices.

"China's oil demand is still on the downward cycle, and the first two quarters of 2009 are the hardest time," said Guo. "This is because oil demand reflects economic performance."

According to China Association of Oil and Chemical Industry, the growth rate of China's oil consumption slowed from 6.1 percent for January-October to 5.8 percent for January-November over the previous year.

Official statistics show China processed 27.27 million tons of crude oil in November, down 2.3 percent from the previous year.

Energy analysts with CBI, a Beijing-based market research agency, said industrial diesel demand nationwide was down 20 percent to 30 percent so far this year as many smaller factories have closed.

CBI analysts said PetroChina planned to process some 10.05 million tons of crude in December, 800,000 tons less than in November, and Sinopec planned to refine 12.2 million tons, down 1.32 million tons.

(China Daily December 25, 2008)