Diesel rationing lifted after local supply boost

By Fu Chenghao  |   2008-6-27  |     NEWSPAPER EDITION

SINOPEC'S local branch lifted diesel rationing in Shanghai yesterday as it boosted supply.

The rationing had been imposed in districts including Putuo, Minhang, Baoshan and Pudong where logistics businesses are centered, with diesel demand strong from trucks.

Sinopec's Shanghai branch also promised to make diesel available at more of its service stations in those districts, and in other areas later.

A shortage of gasoline and diesel had spread across China due to the gap between capped domestic fuel prices and soaring international crude costs, which forced independent refiners to cut processing to avoid losses.

To ease the problem and to curb demand, the government raised gasoline and diesel prices by up to 18 percent last week.

Sinopec Shanghai said it provides 1,150 tons of gasoline a day on the local market, up more than 20 percent from normal levels.

Due to the price rises, more drivers are shifting to the relatively cheaper 90-octane gasoline. Sinopec Shanghai said it had boosted supply of the 90-octane gas by 30 percent on the local market since Wednesday. As the government imposes stricter rules for the transportation of dangerous articles during summer, barring gasoline transportation between 10am and 5pm starting June 15, supplies in certain pump stations might be temporarily affectewd.

The Shanghai government has also raised prices for liquefied petroleum gas for transport use in mid-June to urge more stations to reopen, as a similar shortage has forced scooters and LPG taxis to contend with long queues.