08 November 2010 09:34 [Source: ICIS news]
SHANGHAI (ICIS)--China is experiencing a shortage of diesel amid turnarounds at several local oil refineries and high demand of the commodity amid power cuts by the central government, industry sources said on Monday.
Over 2,000 gasoline stations in Beijing, Shanghai and other large cities in east and south China have temporarily stopped doing business as a result, said a source from the Petroleum Flow Committee of China General Chamber of Commerce.
The diesel shortage came on the back of prolonged power cuts, which were part of the Chinese government’s effort to meet carbon reduction targets set in the 11th five-year plan (2006–2010), the source added.
The local governments of Zhejiang, Jiangsu and Hebei had earlier implemented power restrictions on high energy-consuming chemical plants, such as fertilizer and chlor-alkali units, in those provinces from July to September this year.
Additionally, electricity prices had also been raised in some Chinese provinces since September, the source said.
"Because of the [power] restrictions, some enterprises have turned to diesel to generate the electricity needed to maintain normal production levels," said a source from major petrochemical producer Sinopec.
"Diesel consumption in China’s coastal region has increased by 38% in October on a year-on-year basis," a source from Sinopec said in Mandarin.
The country’s diesel supply had also dropped after several domestic producers shut their oil refineries for maintenance in August and September, added the source from Sinopec.
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