BEIJING (AP) - China's largest oil refiner has suspended diesel exports as the country fights rising inflation, official media reported Saturday.
The decision by state-owned Sinopec will help meet domestic shortages blamed on a government conservation campaign and possible hoarding by state oil companies.
Sinopec and China's other major state-owned oil company, PetroChina, plan to import diesel to help meet demand, the Xinhua News Agency said.
China is trying to cool inflation that surged to a 25-month high in October.
The government posted a statement Saturday announcing further actions to cut rising food costs that have driven the inflation surge. Other measures including stabilizing overall prices of consumer goods.
The diesel shortage and inflation are linked. Farmers need diesel fuel to run tractors and other farm equipment, so the diesel shortage could directly worsen a shortage of vegetables because farmers can't plant and harvest as many.
Politically sensitive food costs surged more than 10 percent as inflation jumped to 4.4 percent in October, well above the government's 3 percent target.
Poor families in China spend up to half their incomes on food and Communist leaders see inflation as a possible trigger of unrest.
Economists say money flooding through the economy from China's stimulus spending and heavy bank lending helped push inflation higher.
China ordered its banks Friday to hold more money as reserves in a new move to curb lending.
Diesel supplies ran low after thousands of factories bought diesel generators to cope with power cuts imposed by authorities to meet energy-saving goals. That boosted already strong fuel demand.
Demand for diesel skyrocketed just as PetroChina and Sinopec were holding back supplies in anticipation of a rise in the retail price.