Amid widespread shortages, service stations allow drivers just a few quarts at a time, forcing buses to stop repeatedly to fill up while passengers fume, said Dai Guowei, an employee of the Zhaoshang Passenger Transport Co.
"After using up the diesel from the last filling station, we have to rush to another station," Dai said Friday. "Usually we have to wait at least a half-hour to fill up. So we get a lot of customer complaints."
Companies across China are hurting amid diesel shortages blamed on price controls that force oil refiners to lose money on each barrel they process. That's prompted them to cut back on production.
The government raised prices Thursday by nearly 10 percent to curb demand and encourage refiners to produce more. But it gave no sign it will change what analysts say is the root of the problem: an antiquated system of state-set prices that encourages waste and distorts business decisions by oil suppliers.
"I don't think this is the start of a new trend. I think it's just a small adjustment," said Steven Knell, an oil industry analyst in London for consulting firm Global Insight.
China's problem is self-inflicted. After three decades of economic reforms, Beijing still sets one-third of prices, including the price of electric power, gasoline and cooking oil. But that clashes with the free-market reality of China's oil refiners, which must pay record-high prices for crude on the world market.
The fuel shortages have hit trucking companies hard, disrupting their service and delaying deliveries.
This week's fuel price hike was the first granted by regulators in 18 months. They had rejected refiners' appeals to be allowed to pass on high crude costs to consumers, citing a need to protect China's poor, who have seen a sharp rise in food prices, particularly pork, the country's staple meat.
[...]
Economists say the impact of the fuel shortages on China's trade-dependent economy is unclear, and will depend on how long they persist.
Customers and some Chinese media accused oil producers this week of creating a phony crisis to force Beijing to raise prices.
China's No. 2 oil company and biggest refiner, China Petroleum & Chemical Corp., known as Sinopec, defended its efforts to meet demand and promised to import fuel in November.
It was unclear whether Thursday's price hike would be big enough to restore refiners to profitability or pay for them to invest in new processing capacity.
China faced a similar pinch last year and Beijing prodded Sinopec and the country's biggest oil producer, China National Petroleum Corp., to supply more fuel, rewarding them with a tax rebate.
We might bitch about high prices, but we're not getting that screwed relatively: there are no shortages. gack. Oughts are China's 1970s? hmmm. This is largely self induced. yet at the same time there is the issue that building more refineries takes years and the demand is rising PDQ...hmmm. Anyone ever thought through China has a hyper inflationary period scenario?
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