Others News
- Government calls for fuel supply boost
Date: 16-Nov-2007 Sources: (Shenzhen Daily)
THE government called on refiners to ensure fuel supplies as drivers faced queues and rationing, despite a recent price hike aimed at pushing oil firms to boost flows of products.
Diesel shortages have eased in Shanghai, but service stations from the outskirts of Beijing to the inland city of Wuhan and many coastal provinces are still struggling to find supplies, station managers and witnesses said.
The government in early November raised State-set fuel prices 10 percent in a bid to end the worst fuel crisis in four years by easing the margins of refiners reluctant to sell at a loss.
But with global crude markets stuck over US$90 a barrel, the increase did not push the industry back into the black and, despite a planned rise in output at major refineries in November, many smaller plants may be holding back.
'(We should) take comprehensive measures to increase crude oil production and refining, to realistically ensure supplies of refined oil products,'domestic media reported Thursday in a summary of a State Council, or Cabinet, meeting chaired by Premier Wen Jiabao.
In the central city of Wuhan, queues of trucks several vehicles abreast blocked roads outside service stations, while police kept order at packed forecourts and people lined up on foot to fill jerry cans and oil drums.
In coastal Fujian Province, many service stations said they were still rationing diesel, while in inland Anhui, one station manager could only operate half-time. Another, with no fuel to sell, was struggling to find cash for salaries.
'We've had shortages for about a month. I don't think we can get out of it any time soon. We are really worried, because if it continues we won't be able to pay our workers? said a manager of an independent gas station in Hefei.
The government followed the price hike with a flurry of statements urging the country's State-owned oil majors PetroChina and Sinopec to boost output, and the firms' refining plans suggest they are toeing the line.
But the small independent refiners who are key swing suppliers of an estimated 15 percent of China's oil consumption are far more price sensitive.
Most are unlikely to have stepped up production on the back of a rise that was only the first in 17 months and still leaves Chinese prices languishing below international market levels.
Analysts say the government is trapped between wanting to keep prices low - because of concerns about inflation and the impact of costlier fuel on vulnerable groups - and fear that if it does not raise them, shortages could spark unrest or harm the economy.
Soaring food costs pushed China's inflation back to a nearly 11-year high in October and Wen also said the country faced strong inflationary pressure and should act to control prices, suggesting little appetite for another increase.
Sponsor Results:
