Tag Archives: fuel shortages

Diesel Fuel Joins China’s Energy Shortages

DIESEL FUEL SHORTAGES are following China’s widespread electric power shortages as factories turn to diesel-powered generators to keep production going and wholesale prices higher than retail ones cause refineries to cut back production.

Petrol stations in many parts of China are reportedly rationing diesel, with lorry drivers reporting having to wait days in some cases to refuel, being limited to small quantities or being charged extra to fill up.

Lorries are the often overlooked underbelly of supply chains, so these latest fuel shortages and prices rises will put further pressure on already strained global supply chains.

Wholesale prices of petrol and diesel have risen by around one-fifth over the past month. They are now above government-set retail prices, leading to production cutbacks at refineries, as at power plants when coal and natural gas prices jumped.

Diesel output was down 4.4% in the first nine months of this year compared to the same period a year earlier, although it ticked up in September. Reserve inventories have been run down by about one-fifth. Meanwhile, retail prices have increased by 30% this year. Export supplies are being diverted to the domestic market.

The power and fuel shortages are pushing up producer prices — by a record 10.7% in September — although this has yet to work through to retail prices. Consumer price inflation rose just 0.7% in September.

In part, consumption is being depressed by lockdowns to contain a new wave of Covid-19 outbreaks that have spread to 11 provinces over the past ten days.

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