SHANGHAI -- China will use up to 350 million tons of oil this year, ten million tons more than last year, said an expert with the country's top economic planner.

High oil prices have impacted the nation's energy budget, said Jiang Xinmin, an expert with the Energy Institute under the National Development and Reform Commission (NDRC), adding that the country might replace oil with gas in some areas.

Jiang said domestic oil production was increasing at around 1.5 percent a year, whereas oil consumption had jumped by about 8 percent a year since 2002, compelling China to import more.

As recently as ten years ago, he said, the country had been a net oil exporter but in 2006, nearly 50 percent of China's oil consumption was imported from abroad.

International oil prices have risen from US$25 per barrel in 2003 to US$70 these days. "The unrest in the Middle East adds to oil price uncertainties in the global market," said Jiang.

Despite the high price of crude, production in China's large oil refineries has scarcely increased because petrochemical companies are struggling to deal with rising production costs, said the expert.

In 2006, China imported 139 million tons of crude oil, up 17 percent on 2005. Imports accounted for 47 percent of the country's consumption. Industry observers have warned China will likely need to import more than 50 percent of its petroleum needs in a year or two.