Soaring world prices don't seem tohave crimped China's oil use, with statistics released on Thursday byan industry group indicating that first-half consumption of oil andrefined oil products set records.

    The China Petroleum and Chemical Industry Association (CPCIA) saidthat "apparent consumption" of refined products -- gasoline, dieseland kerosene -- rose 14.6 percent year-on-year to 106 million tonnes,while crude oil use rose 6.3 percent to 183.3 million tonnes.

    "Apparent consumption" represents the sum of net imports andoutput, according to the group, and can be used as a proxy for realconsumption excluding inventory.

    Apparent consumption of gasoline rose 16.2 percent, that of diesel14.7 percent and kerosene, 6.66 percent, according to the CPCIA.

    The expanding economy, booming auto demand and reconstructionafter the severe winter weather in southern China and the May 12earthquake were the major causes of growing consumption in the firsthalf, said Zhu Fang, a CPCIA researcher.

    Gross domestic product expanded 10.4 percent in the first half, 1.

    8 percentage points below a year earlier but still a rapid pace.

    The association's figures indicated that state price controls haveled to unintended and even negative consequences.

    For example, the state price ceilings caused an "abnormal"consumption rise through hoarding and smuggling abroad of refinedproducts, said Zhu.

    Below-cost prices did not restrain China's demand for oil butrather boosted it, said Niu Li, a researcher of the State InformationCenter, a government think tank.

    According to the China Association of Automobile Manufacturers,sales of domestic cars increased 18.52 percent to 5.18 million unitsduring the first six months, a high rate by global standards withmarkets in Europe, Japan and the United States hit by rising gasolineprices.

    Below-cost fuel prices led to a low utilization rate at refineriesand the ensuing supply shortage in most parts of the country boostedChina's imports of refined oil products.

    According to the CPCIA, net imports of oil products (gasoline,diesel and kerosene) stood at 4.3 million tonnes in the first half,up sharply from 2.8 million tonnes a year earlier.

    Gasoline imports surged more than 3,000 percent and those ofdiesel rose 1,143 percent. Net crude oil imports stood at 88.97million tonnes, up 11.6 percent. The trade deficit from oil and oilproducts doubled from a year earlier to 68.35 billion U.S. dollars.

    To reverse the trend, China raised benchmark gasoline and dieseloil retail prices by 1,000 yuan (146.6 U.S. dollars) per tonne onJune 20, with the price of aviation kerosene up 1,500 yuan per tonne.

    The price rise, although insufficient by international standards,has restrained demand and thus relieved the country's supply problems,to some extent, said Zhu.