Petrol shortages hit China's major cities
5 June 2008
China's major cities are starting to face fuel shortages, the Financial Times reported. Petrol stations in Shanghai, Beijing and Guangzhou have rationed stocks or shortened operating hours because of supply shortages, particularly of diesel. Oil companies have cut supply in the local market because prices are fixed by the government and they are selling at a loss. The gap between international and Chinese prices for petrol is about 20%, while the figure is 40% for diesel. Analysts say the Chinese government will probably not raise petrol prices, despite the fact that Taiwan, Malaysia, Indonesia and India have done so in recent weeks. Instead, the government is intent on controlling inflation, which hit 8.5% in April. The government last raised prices in November, when it hiked the price of gasoline and diesel by 10%. Fuel rationing was also reported before the price hike.