Diesel consumption in China is set to expand rapidly according to a new report, with the nascent automotive market rapidly maturing and driving sales.

China's official Xinhua news agency - which has access to the report - says that oil imports in the country could hit 120 million metric tons in 2004.

The country's surging automotive sector is said to be playing a big role in boosting this demand, which makes it the second largest consumer in the world.

Diesel exports are forecast to slow dramatically in 2004, as domestic demand soars on the back of the transport industries.

Diesel consumption is expected to stand at 95.5 million tons this year, marking a rise of nearly 14 per cent on the previous year.

Meanwhile, the report concludes that imports of diesel will rise to 1.2 million tons in 2004 - a six-year high.

The rapid growth of the diesel market has been accompanied by efforts to introduce emission controls, opening up a major new potential market for platinum. Diesel cars use platinum catalysts to control harmful exhaust emissions.