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ECONOMY
Weekly Watch> WEEKLY WATCH NO. 44, 2011> ECONOMY
UPDATED: October 28, 2011 NO. 44 NOVEMBER 3, 2011
Diesel Woes
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Acute diesel shortages are sweeping through parts of China due to surging demands and tighter supplies.

More than 20,000 private gas stations have run out of diesel, said the China Chamber of Commerce for Petroleum Industry in a report. Moreover, the shortfalls, which previously occurred in wealthy areas in southern and eastern provinces, are now spreading to inland regions, including Anhui, Sichuan and Hubei provinces.

"The fourth quarter is usually a peak season for diesel use," said Yuan Xuezhi, a senior researcher with the Shenzhen-based research company CIConsulting.

Meanwhile, owners of private gas stations have complained that it is difficult to purchase diesel from PetroChina and Sinopec, the country's two largest oil suppliers.

The two energy giants account for more than 80 percent of diesel supplies in China, but they have been blamed for reducing output and stockpiling diesel to pressure the government to raise prices.

The National Development and Reform Commission on October 8 announced a reduction in retail prices for gasoline and diesel of 300 yuan ($47.2) per ton.

The two companies denied the allegations, saying all their refineries are operating at full capacity and are not rationing how much customers can buy.

But data from 315.com.cn, a leading Chinese oil information site, showed operating rate of the two refiners was only around 77 percent between June and September, 7 percentage points lower than the same period of last year.

"State-owned oil companies should shoulder their responsibility of ensuring supplies, instead of blindly seeking profits," said Lin Boqiang, Director of China Center for Energy Economics Research at Xiamen University.



 
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