Sinopec boss passes the buck to government

Sinopec Corp Chairman Fu Chengyu's recent remarks on the worsening air quality in parts of China since the beginning of 2013 is not only a massive public relations disaster but also highlighted a serious lack of responsibility.

Fu, head of China's largest fuel supplier, acknowledged that the nation's refineries were among the culprits for the toxic smog that is choking Beijing and other cities. But he told Xinhua news agency last week that it was not that the refineries failed to meet the air-quality standards in the country but the government standards were rather lax.

In other words: "It's not our fault."

Fu was responding to media reports that pointed to the high sulfur content in fuels sold by his company and others.

Maybe what Fu said was true but it seems a bit disingenuous of him to just shirk the whole responsibility by blaming the government, the company's ultimate parent.

Let's face it, oil majors like Sinopec wouldn't want tougher fuel standards because that would mean upgrading their refining facilities, leading to higher costs and smaller margins in a system where the government still caps fuel prices to keep inflation in check.

These state oil majors, in their quest for growth at all costs, have strong lobbying power to resist tougher emissions standards, even trumping over government agencies such as the Ministry of Environmental Protection.

Currently, Beijing has the strictest emission standards among cities on the Chinese mainland, the so-called National V - similar to Euro V standards. Yet the nation's capital is among the worst hit by air pollution, largely due to its huge car population, the burning of dirty coal for heating and even its geography.

Surrounding mountains form a semi-circular basin that traps pollutants in a city that managed to clean up the air long enough to host the 2008 Olympic Games.

The pollution has been so severe some days that Beijing municipal officials have had to warn residents to stay indoors and issue rulings forcing some government vehicles off the roads.

Much of China still uses the National III vehicle emissions standards, which are similar to the Euro III standard - allowing the sulfur content in gasoline to be as high as 150 parts per million.

The Euro V standard caps the sulfur content at below 10 ppm.

Shanghai and some relatively developed regions like Jiangsu and Guangdong use the National IV standard.

Sinopec is not violating any rule or law in supplying most of China with National III standard fuel. But it does benefit from relatively low fuel quality standards.

Fu's response to hazardous levels of air pollution hardly reflects the image of a major state company fond of touting its corporate social responsibility.

Not surprisingly, his remarks unleashed a flurry of criticism from the media and on the Internet.

"Sinopec has acknowledged fuel is one of the culprits behind the bad air quality, but it's also good at evading the responsibility," one online post read.

Trying to dispel the public backlash, the company last Friday said it will upgrade desulfurization facilities at 12 subsidiaries by the end of this year, and will start selling cleaner gasoline that meets the National IV standard from next year. But that only triggered concerns about higher fuel prices.

This is not the first time Sinopec has run into trouble. In 2011, the company used its own workers to post online comments, supporting a rise in refined fuel prices, that would benefit the company's bottom line while making it dearer for motorists.

Fu might be advised to hire a new public relations team and think twice before commenting on sensitive issues.