China faces 7.3 mln ton LPG shortfall in 2010: report

BEIJING (AFP) — China will face a shortfall of 7.3 million tonnes in liquefied petroleum gas (LPG) supply for auto fuel and cooking fuel by 2010 due to surging demand in the countryside and small and medium-sized cities, state media reported on Monday.

According to the development plan of the country's oil industry, domestic demand of LPG is forecast to hit 26.2 million tonnes in 2010, while supply is expected to stand at only 18.9 million tonnes, the Xinhua news agency said.

Small and medium-sized cities are still keen to use LPG, meaning the market is likely to continue to grow, the report said, citing Bai Yi, deputy head of the government-controlled National Petroleum and Chemical Planning Institute.

Per capita LPG consumption in China was 17.3 kilograms (38.1 pounds) in 2006, still below the level in the European Union and the United States, Bai told an industry forum in the northern city of Tianjin over the weekend.

Bai predicted that consumption growth of LPG will gradually slow in the next decade, because of the emerging liquefied natural gas market.

Bai gave no indication of how China might handle the shortfall in LPG, which is mainly used as auto fuel and cooking fuel.

China's roaring economic growth has drastically increased its thirst for new energy, with demand for petroleum and electricity rising especially steeply.

As domestic energy sources are drying up, China has been keen to explore resources overseas in areas such as in Africa and South America.