TOKYO, Dec 18 (KUNA) — China, the world’s second-biggest oil consumer, announced Tuesday the setting up of a national oil reserve center, state-run Xinhua News Agency reported.
With the approval of the government, the center was officially launched Tuesday, said the National Development and Reform Commission (NDRC), China’s top economic planning agency which oversees a wide-range of social and economic affairs, including energy.
The center, the administrative body of the country’s national oil reserve system, takes the responsibility of building and making use of the country’s strategic oil reserves, the commission said in a statement, according to Xinhua.
China started a state strategic oil reserve base program in 2004 as a way to offset oil supply risks and reduce the impact of fluctuating energy prices worldwide on China’s domestic market of refined oil.
The center will also keep an eye on the movement of demand and supply of both domestic and international oil markets, the report said, adding that China has decided to establish four strategic oil reserve bases in the coastal cities of Dalian, Qingdao, Ningbo and Zhoushan.
They are designed to maintain strategic oil reserves of an equivalent to 30 days of imports, or about 10 million tons. China’s strategic oil reserve stood at two to 3 million tons, and would be expanded to about 12 million tons by 2010, the NDRC said.
According to a statement from the third China-US Strategic Economic Dialogue, the US and China agreed to strengthen cooperation on the building and management of strategic oil stocks.
The statement said, “Coordinated use of strategic petroleum reserves increases energy security for net oil-importing countries during times of significant supply disruption.” Imports accounted for 66 percent of US domestic petroleum use last year, the report said. The figure for China, which became a net importer of oil during the 1990s as its economy took off, was 47 percent.