Energy & Resources

Pump priming

Oil major Sinopec gets into trouble on web

Pump priming

“Have you read my blog?”

In an early episode of Gordon Ramsay’s Kitchen Nightmares, the irasicible Scottish chef visits the Fish and Anchor in mid-Wales. Not too impressed with the food, he is even less enamoured to read a review posted on the internet about the same eatery that gushes: “I’ve been to Gordon Ramsay’s and to find a restaurant better than his on my doorstep here in Wales is a dream come true.”

When Ramsay confronts the Fish and Anchor’s owner it emerges that Welshman had posted the dubious review himself.

Evidence, of course, that you cannot always trust what you read on the internet. And in China doubly so, as a new scandal has revealed.

Last week a Shenzhen professor revealed on his weibo (a Twitter-like service, see WiC95) that oil major Sinopec has been attempting to use the internet to rally public opinion behind an oil price hike.

Professor Sun Haifeng published a copy of a memo that Sinopec’s management had sent to its 371,000 employees offering prizes to those who wrote the best blog arguing why fuel prices should rise. According to the Hong Kong Economic Journal the intention was to bolster public opinion for higher fuel prices, and even suggested official lines that the budding Sinopec bloggers were to take. These included a “gentle reminder” that a barrel of domestic fuel is now $16 cheaper than an internationally-priced equivalent, and that refiners will continue to incur losses unless there is a timely adjustment in prices at the pump.

After the tactic was exposed, a Sinopec official admitted to the Southern Metropolis Daily that the company had dreamt up the contest but argued that it was designed to improve communication with the public.

The timing is nothing if not ironic: Xinhua had only just reported that the government was intent on cracking down on similar practices. The official news agency had quoted a police estimate that over half of online comments are made by “unscrupulous” paid parties. Many are made by what is known as the ‘50 cent’ industry. These netizens are widely used by firms seeking to generate praise for their own products or to badmouth rivals. The name derives from the fact they are supposed to get paid 50 fen ($0.05) per posting.

But Professor Sun told the South China Morning Post that Sinopec’s online strategem will prove unpopular with the public, which is increasingly wary of manipulated online opinion. “The internet is a public utility in the same way as a public road. It’s not right for it (Sinopec) to do such things,” he said.

Why the need for the online PR efforts? The Economic Observer says that China’s state oil companies are very unpopular with the public, which feels them to be too powerful and unaccountable. “The masses are very unhappy with the price increases of the state-owned monopolies that control energy,” it writes.

But why Sinopec’s specific need to persuade those masses to stomach such a rise? Because it is more reliant than PetroChina and CNOOC on imported oil, which makes its refining operations more susceptible to losses when oil prices rise dramatically (paradoxically it doesn’t have the power to set the price at petrol stations).

Still, Sinopec got better news this Sunday when the National Development and Reform Commission did allow a refinery price hike of Rmb350 per tonne ($53.2), or 4.5% up on the previous price.

The internet campaign has not made Sinopec any more popular, however. The increases continue to mean higher petrol prices for drivers.

China SignPost, a blog, reckons that the latest hike means that the Chinese are now paying 30% more than US drivers for gasoline.

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