Others News
- Fuel shortage spreads in China
Date: 1-Nov-2007 Sources: (Shenzhen Daily)
CHINA'S worst fuel shortage in two years had spread to the capital and other inland areas by yesterday, and one man was killed in a brawl at a petrol station queue, upping pressure on the government to intervene.
Diesel shortages in Beijing, which escaped previous supply crunches unscathed, highlighted tensions between the government and its increasingly independent oil firms about who should pay for the country's generous fuel subsidies.
Top refiner Sinopec yesterday pledged more supplies and bought additional diesel fuel abroad, but it may fall to the government to end the stand-off by raising domestic prices, easing taxes, promising another year-end pay-off - or simply strong-arming suppliers into selling more fuel at a loss.
'Sinopec will work hard to resolve the diesel supply pressure,'a headline in the company paper announced. Even so, at least five of its Beijing stations were rationing supplies.
At stake are profits for major oil companies, Sinopec and PetroChina, from selling motor fuel in the world's second-largest consumer country where pump prices have not been raised in 17 months even as crude costs hit a series of record highs.
In scenes reminiscent of the weeks-long shortages in the summer of 2005, also caused by the yawning gap between domestic prices and global crude costs, petrol stations across the country were turning away trucks and rationing supplies.
After striking the southeastern coastal provinces including Guangdong and Fujian, and the financial hub of Shanghai, they were now hitting the interior, managers and local media said yesterday.
In Hefei, the capital of eastern Anhui Province, independent suppliers had almost all run out of diesel and several controlled by the oil majors were rationing supplies, station workers said.
A man was killed in fuel-strapped Henan during a brawl over queue jumping at a service station, police said. Parts of Hunan and Hubei provinces also face shortages, media reports said.
The Chinese Government worries that more costly energy could push up already-high inflation, and effectively forces its refiners and retailers to subsidize State-set prices.
Diesel costs about US$0.64 a liter at the pump in Beijing, versus around US$1 in Singapore and US$2 in Britain.
But a recent rally in global crude prices to above US$90 a barrel has deepened large firms' losses and made them even more reluctant to keep markets supplied. The soaring prices have also forced many independents out of the market. The burden of making up the difference has fallen on the State-owned companies.
An industry source said Sinopec had bought another 30,000 tons of diesel for import in November to the hardest-hit southeastern coastal areas. And it will boost refinery runs by 800,000 tons next month, a company paper said.
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