The National Development and Reform Commission issued a statement urging all oil companies to operate at maximum capacity and to adjust the product mix to produce more diesel.

The country's largest oil producer, China National Petroleum Corp, and the largest oil refiner, China Petroleum and Chemical Corp or Sinopec (0386), were also asked to supply crude to qualified refiners in northeastern provinces, as well as those in Shandong, Shaanxi and Sichuan provinces, and buy back refined oil products from them. In addition, the NDRC said it will allocate the country's oil supply evenly so that shortages in specific regions can be curbed without imposing rationing in other areas.

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In order to safeguard sugar production in Yunnan and Guangxi provinces, CNPC was asked to provide an additional 20,000 tonnes of diesel to Yunnan and 7,000 tonnes to Guangxi. Sinopec increased its diesel supply to Yunnan by 27 percent. CNPC and Sinopec halted fuel rationing in Beijing, Tianjin, Shanghai as well as Guangdong province on November 24.

Meanwhile, the NDRC is to monitor the oil market closely to prevent refiners from hoarding oil and raising prices without permission.

The mainland has been experiencing oil shortages as refiners, facing record crude prices in the world market, are discouraged from producing because Beijing sets the price of refined products relatively low. On November 1, China lifted the prices of gasoline, diesel and aviation kerosene by 500 yuan (HK$525.70) per tonne, prompting the country's oil producers to increase oil imports - yet the supply of refined oil products in the market is still inadequate.