Sinopec aims for cleaner fuel

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BEIJING, Feb. 4 (UPI) -- Chinese state-owned oil refiner Sinopec said it is upgrading its desulfurization capabilities to sell cleaner gasoline beginning in 2014.

Sinopec Chairman Fu Chengyu said the company would invest around $4.8 billion a year to improve its refiners, The Wall Street Journal reports.

The announcement comes as China has faced hazardous levels of air pollution. A report by China's Ministry of Environmental Protection last week said that smog over Chinese skies covered 1.54 million square feet.

While the pollution is attributed in large part to China's heavy reliance on coal-fired power plants, the increasing number of vehicles on China's roads is also a huge factor.

In 2000, there were 4 million cars for a population of 1.3 billion. Experts had projected that the number of cars would be six times higher by the end of the decade, but instead it increased 20-fold.

China has no national standard for sulfur content in gasoline but regional standards range from 10 parts per million, or below in Beijing; 50 parts per million or below in developed provinces and municipalities such as Shanghai and Jiangsu and 150 parts per million or below in other locations.

That compares with a sulfur content in the United States and Europe of 30 and 10 parts per million, respectively.

Fu said upgrades of desulfurization facilities at Sinopec refineries would be completed by the end of this year, state-run news agency Xinhua reports. The cleaner gasoline and diesel fuel for domestic use would be equivalent to Euro 4, the European emission standard which came into force in 2005.

Social networking site for car owners and dealers, Chenwen.com, in sample surveys on the sulfur content of fuel from gas stations in east and suburban Beijing on Jan. 24 found that nearly one-quarter of the gasoline tested failed to meet the city's 10 parts per million standard.

Yet Fu defended his company's oil quality, saying that air pollution wasn't the result of substandard oil products but instead placed blame on the country's low gasoline standards.

Cleaner fuel could result in higher prices.

"With the added costs [to produce low sulfur fuel] involved, fuel prices will eventually have to rise," Yan Shi, energy analyst at UOB-Kay Hian Investment Consulting in Shanghai, was quoted as saying by Platts news service.

China's last price change was last November when the National Development and Reform Commission reduced gasoline and diesel prices about 3.5 percent, in line with falling crude prices.