Chinese gas shortages despite record oil prices

Another driver, at Geiju city, said a job that would have taken one day in the past, now took three: one on the road, two queuing for fuel.

Nine days ago, a truck driver was reported to have been stabbed to death in central Anhui province after a row about queuing.

A few days earlier, at Ezhou in Hubei province, 100,000 people were stranded, unable to get to work, because city buses had run out of fuel.

Beijing has been insulated from the headache, and the wealthy coastal provinces are mostly better stocked, because the refineries are nearby.

The problem would intensify as winter approached, and was starting to affect exports, warned the Commerce Ministry, since diesel was crucial for shifting products to ports.

The system is suffering from pressure of demand to sustain its economic growth at the current 11.5per cent - with China now the second-biggest consumer of oil after the US.

Diesel imports rose 46.5per cent in the first nine months of the year, compared with the same period last year.

The other cause of the supply-demand mismatch, is the stuttering transition from government-controlled prices to market pricing.

The Government wishes to graduate towards a system that allows prices to move with international markets.

But inflation is at a 10-year high of 6.5per cent and the Government is reluctant to let oil, a key input for distribution of all products, float free as yet.
cont'd