Page 182 - 2023 White Paper on the Business Environment in China
P. 182
3 White Paper on the Business Environment in China
stable coal supply, and massive renewable 13.33 million b/d versus the same period of 2021.
energy infrastructure projects. During the 2022 To surpass the 2021 average of 14.07 million b/d
power supply crisis, the State Grid Corporation in 2022, China's apparent oil demand would have
of China (State Grid) maximally mobilized power to average 14.72 million b/d in August-December,
resource from across other provinces to Sichuan. an increase of 1.39 million b/d over the January-
Moreover, the Three Gorges Dam increased water July average, Energy Intelligence calculates. Such
discharge to help ease a severe drought in the a strong rebound in China's oil demand seemed
middle reaches of the Yangtze River. Undeniably, increasingly unlikely if Covid lockdowns continued,
China's current power system as a whole has especially given concerns about the possibility of a
developed to be the world's leading model with global recession triggered by runaway inflation and
the most advanced, digitalized and automated rising interest rates. Energy Intelligence calculates
infrastructures that widely cover various regions. China's apparent oil demand from the country's
China has the advantage of being a big country, refinery throughput plus its net imports of 11
as when a region is facing challenges, other parts different refined products. The calculation does
can assist. High temperatures compounded not include changes in inventory levels because
by drought were the major factor behind the that information is not publicly available in China.
shortage of electricity in the southern provinces Crude runs at Chinese refineries fell to a fresh
that have a high proportion of hydroelectric 2-year low of 12.58 million b/d in July. That was
generation. Those provinces traditionally rely on down 842,000 b/d from June when runs seemed
hydroelectricity to supply peak summer electricity to be picking up as Covid lockdowns were lifted.
consumption. Ultimately, China has built an Some industry sources believed the low crude
advanced power supply system which can meet runs reflected several months of dismal demand.
consumption demands most of the time, but in The closure of the 320,000 b/d Sinopec Shanghai
the face of extreme weather conditions, it is still PetroChemical refinery after a fire in June, along
hard to meet the demand. Meanwhile, the current with maintenance at several plants, partly explain
wave of developing renewables has become a the low July crude runs. Still, the July refining data
temporary challenge to ensure the balance of may not have captured all of the crude that was
supply and demand of electricity in real time, actually processed during the month. In August
especially during peak electricity consumption, 2022 Chinese authorities launched a new round
experts said. Hydropower is not yet able to of tax audits for independent refiners, which tend
withstand the effects of extreme weather, and to under-report their output of gasoil and gasoline
new energy sources are far from enough to cope to lower their tax bills. Beijing has long been trying
with extreme weather. China should build up to crack down China's small "teapot" refineries,
pre-warning systems against extreme weather which have a reputation for dodging taxes. Some
phenomena and invest in a more stable power refiners may have started to under-report their
grid and more scientific reservoir joint dispatch crude processing in July to make sure that the
mechanisms. The public would certainly show numbers match up with their output of products.
more support to the development of new energy Consultancy Energy Aspects says a seasonal uptick
(GT Staff). in construction activity in September and October
would drive diesel demand to its highest level in
Oil 2022. Brutal heat waves in China also boosted the
consumption of diesel for power generation, with
China's apparent oil demand plunged 7.5% output of hydropower unlikely to recover in the
in July 2022 versus the previous month to 12.79 short term (EIG).
million barrels per day — the lowest monthly tally
since April 2020 when China was starting to emerge Oil demand in China started recovering in
from its first wave of the Covid-19 pandemic. The September 2022 after the end of Covid restrictions.
unexpectedly low July number, largely the result Lockdowns in the world’s second-largest oil
of collapsing refinery runs, left China's apparent consumer earlier the year dampened demand and
oil demand for January-July 2022 down 2.5% at weighed on prices and price outlooks because of
Beijing’s zero-Covid policy. The economic decline
182
stable coal supply, and massive renewable 13.33 million b/d versus the same period of 2021.
energy infrastructure projects. During the 2022 To surpass the 2021 average of 14.07 million b/d
power supply crisis, the State Grid Corporation in 2022, China's apparent oil demand would have
of China (State Grid) maximally mobilized power to average 14.72 million b/d in August-December,
resource from across other provinces to Sichuan. an increase of 1.39 million b/d over the January-
Moreover, the Three Gorges Dam increased water July average, Energy Intelligence calculates. Such
discharge to help ease a severe drought in the a strong rebound in China's oil demand seemed
middle reaches of the Yangtze River. Undeniably, increasingly unlikely if Covid lockdowns continued,
China's current power system as a whole has especially given concerns about the possibility of a
developed to be the world's leading model with global recession triggered by runaway inflation and
the most advanced, digitalized and automated rising interest rates. Energy Intelligence calculates
infrastructures that widely cover various regions. China's apparent oil demand from the country's
China has the advantage of being a big country, refinery throughput plus its net imports of 11
as when a region is facing challenges, other parts different refined products. The calculation does
can assist. High temperatures compounded not include changes in inventory levels because
by drought were the major factor behind the that information is not publicly available in China.
shortage of electricity in the southern provinces Crude runs at Chinese refineries fell to a fresh
that have a high proportion of hydroelectric 2-year low of 12.58 million b/d in July. That was
generation. Those provinces traditionally rely on down 842,000 b/d from June when runs seemed
hydroelectricity to supply peak summer electricity to be picking up as Covid lockdowns were lifted.
consumption. Ultimately, China has built an Some industry sources believed the low crude
advanced power supply system which can meet runs reflected several months of dismal demand.
consumption demands most of the time, but in The closure of the 320,000 b/d Sinopec Shanghai
the face of extreme weather conditions, it is still PetroChemical refinery after a fire in June, along
hard to meet the demand. Meanwhile, the current with maintenance at several plants, partly explain
wave of developing renewables has become a the low July crude runs. Still, the July refining data
temporary challenge to ensure the balance of may not have captured all of the crude that was
supply and demand of electricity in real time, actually processed during the month. In August
especially during peak electricity consumption, 2022 Chinese authorities launched a new round
experts said. Hydropower is not yet able to of tax audits for independent refiners, which tend
withstand the effects of extreme weather, and to under-report their output of gasoil and gasoline
new energy sources are far from enough to cope to lower their tax bills. Beijing has long been trying
with extreme weather. China should build up to crack down China's small "teapot" refineries,
pre-warning systems against extreme weather which have a reputation for dodging taxes. Some
phenomena and invest in a more stable power refiners may have started to under-report their
grid and more scientific reservoir joint dispatch crude processing in July to make sure that the
mechanisms. The public would certainly show numbers match up with their output of products.
more support to the development of new energy Consultancy Energy Aspects says a seasonal uptick
(GT Staff). in construction activity in September and October
would drive diesel demand to its highest level in
Oil 2022. Brutal heat waves in China also boosted the
consumption of diesel for power generation, with
China's apparent oil demand plunged 7.5% output of hydropower unlikely to recover in the
in July 2022 versus the previous month to 12.79 short term (EIG).
million barrels per day — the lowest monthly tally
since April 2020 when China was starting to emerge Oil demand in China started recovering in
from its first wave of the Covid-19 pandemic. The September 2022 after the end of Covid restrictions.
unexpectedly low July number, largely the result Lockdowns in the world’s second-largest oil
of collapsing refinery runs, left China's apparent consumer earlier the year dampened demand and
oil demand for January-July 2022 down 2.5% at weighed on prices and price outlooks because of
Beijing’s zero-Covid policy. The economic decline
182
