China's fuel queues get longer
March 24, 2008
edition.cnn.com
SHANGHAI, China (AP) -- China's leaders are facing renewed pressure over shortfalls in diesel and gasoline, with lines growing at filling stations in major cities Monday as the gap widens between international crude oil values and centrally controlled fuel prices.
The shortages, first reported in southern and inland China, appeared to be spreading to the wealthier coastal areas as filling stations struggled to get shipments from refiners. Four stations contacted Monday in Shanghai said their daily diesel shipments had not yet arrived.
"You could try your luck later in the day. Now, we have no diesel available at all," said a staffer at a filling station in the city's eastern Pudong district. "I can't promise you anything, though, for once it comes, it will soon run out," said the station attendant, who would not give his name because he was not authorized to speak to the media.
Staff at another filling station said they were on duty round the clock, waiting for diesel shipments. Authorities downplayed the shortages and urged drivers to remain calm and not hoard fuel.
Shanghai, China's commercial center and a key trade transport hub, has enough diesel to last more than 10 days, the city's Economic Commission said in a statement seen Monday on its Web site.
"Prices are set by the government, so consumers should not panic over fears of surging prices or try to stockpile fuel," it said.
It appealed to city residents to "show understanding regarding the temporary shortages and to please preserve traffic order around filling stations" -- alluding to troubles with frustrated drivers unable to fill their tanks.
Shortages in the second half of last year briefly affected Shanghai and other major cities. But those shortfalls soon disappeared after the government ordered oil companies to ensure supplies, and then raised fuel prices by about 10 percent.
Now, with inflation at its highest level in a dozen years, China's economic planners are resisting pressure from refiners for price hikes.
The consumer price index saw an 8.7 percent jump in February over a year earlier, prompting Premier Wen Jiabao to vow more stringent controls to help rein in inflation.
China supplied its own energy needs for decades from domestic oil fields but became a net importer in the 1990s as its economy boomed. Imports, which now supply nearly half of demand, rose 12.3 percent last year to 1.1 billion barrels.
With crude oil prices at over US$100 a barrel, independent refiners have cut back or stopped production. Major state-owned suppliers Sinopec and PetroChina, ordered by the government to ensure supplies to major cities and key sectors such as farming and public transport, were limiting sales to independent gas stations in some regions, state media reports said.
The severe diesel shortages last year prompted authorities to order PetroChina's parent company, China National Petroleum Corporation, and Sinopec, the country's biggest refiner, to import thousands of gallons (liters) of diesel and to expand refining capacity.
====
The Chinese government is still setting prices at a level that keeps independent refiners shut down so they import the difference and drive up diesel prices world wide. |
