China's diesel imports jumped more than fourfold in December from a year earlier after the government ordered refiners to ensure supplies and ease shortages.

Imports of the fuel increased to 820,000 metric tons last month, the highest in at least five years, reported Bloomberg News, quoting customs data released in Beijing yesterday. In 2007 alone, China more than doubled diesel imports to 1.62 million tons.

The imports, coupled with increased production, helped state oil companies to restore normal fuel supplies late last month in Asia's biggest energy-consuming nation. The country had its worst fuel shortages in more than two years when demand reached a peak last summer.

"China has to increase imports to meet domestic supply," Bai Xuesong, a senior engineer with China International Chemical Consulting Corp, said from Beijing yesterday.

"The demand for diesel will rise again from March before the harvest season comes."

Exports of diesel were unchanged at 30,000 tons in December compared with November, the lowest since July. Full-year exports fell 15 percent to 660,000 tons, yesterday's figures show.

China may halt diesel imports in February because of increased domestic production and lower demand during the Lunar New Year holiday week, officials at China International United Petroleum & Chemical Corp and China National United Oil Corp, said. These are the nation's two largest oil trading companies.

Fuel supplies have returned to normal after the company increased imports and production, China Petrochemical Corp, the nation's largest oil refiner, said on December 25.

China halved import tariffs on gasoline, diesel and jet fuel to one percent starting January 1 and waived coal tariffs to mitigate oil companies' losses when importing.

Chinese refineries have been losing money from processing crude into fuel since July after crude costs soared. China Petrochemical will lose about 500 yuan (US$69) for each ton of gasoline it imports, the state refiner said in September. China keeps fuel prices lower than international levels to limit their impact on inflation.

(Shanghai Daily January 16, 2008)