China’s chronic diesel shortage

[GoFlyKiteNow]

China’s chronic diesel shortage

China’s chronic diesel shortage continues to cause long lines at gas stations and serious traffic jams. Since trucks can only purchase 500 yuan ($75) worth of diesel, more time is spent waiting in gas lines than transporting goods to market.

The lack of fuel in Sichuan Province has interrupted the production and delivery at Tingyi instant noodles, China's largest brand. Because of the shortage, transportation cost hikes are affecting other sectors.
Long Lines and Disruptions

Sanxiang Daily reported that early on Nov. 15, more than 100 trucks lined up at a gas station on Tanshao Highway in Hunan Province for diesel refueling. A driver from Jiangxi Province, who had waited four hours in line, said that there is a diesel shortage all across China. Two days prior, over 1,000 vehicles lined up at the border of Sichuan and Shaanxi Province for refueling, and Gansu Province also saw 1,000 drivers waiting three days to buy fuel.

The shortage’s effects have already rippled into the broader economy. It’s hard to hail a cab, since taxis operating on diesel are either lining up at gas stations or have stopped operating.

Construction companies have to send staff to hunt for fuel. Loaded cargo trucks from logistics companies can’t move. Shipping costs for vegetables, delivery services and cross-country transportation are also higher.

 

[longbow]

Guess the booming economy is taxing the refineries. But seems that problem is over. Guess the 5.6 million barrel refining capacity is barely meeting demand.

Here is latest from Bloomberg.

China Oil Refiners Cut Rates as Diesel Shortage Eases
By Bloomberg News - Dec 9, 2010 11:58 PM PT

Oil refineries in China, the world’s biggest energy consumer, lowered crude processing rates as a diesel shortage eased and some plants started maintenance, data from Oilchem.net showed today.

PetroChina Co. and China Petroleum & Chemical Corp. were among refiners that operated at an average 83.47 percent of capacity as of yesterday, 4.24 percentage points lower than two weeks earlier, the Shandong-based industry website said in a fortnightly survey.

A shortage of diesel in recent months prompted refiners to increase processing and defer maintenance plans. The shortfall has since eased after refineries operated at record rates and state oil companies ramped up imports, Zhang Dafu, chairman of Jiangsu province’s biggest refinery, said on Dec. 8.

China Petroleum, also known as Sinopec, will shut an 8 million ton-a-year crude distillation unit at its Gaoqiao refinery in Shanghai and a 1 million ton-a-year catalytic cracker at Jiangxi’s Jiujiang plant for the whole of December for scheduled maintenance, Oilchem.net said.

Refineries in eastern China were running at 76 percent of capacity, those in the south at 88 percent, plants in the northwest and northeast at 84 percent while those in the north were at 86 percent, according to Oilchem.net.

The survey covered 23 major refineries with a total annual capacity of 281 million tons, or about 5.6 million barrels a day, according to the publication.

To contact the reporter on this story: Baizhen Chua in Beijing at [email protected]

To contact the editor responsible for this story: Clyde Russell at [email protected]

 

[longbow]

As much as some try and kid themselves by saying that China is running at 5% GDP growth, the huge consumption of raw material by the Chinese points to a booming GDP.

From coal to iron ore to food to oil, all these "feedstock" to factory floor of the world are reflection fast growing economy.



Saudi Aramco CEO Says China Overtakes U.S. as Largest Customer
By Arif Sharif and Rob Verdonck - January 28, 2010 12:09 EST
inShare.More
Business Exchange Buzz up! Digg Print Email . Khalid al-Falih
Jan. 28 (Bloomberg) -- Saudi Arabian Oil Co., the world’s biggest crude producer, is exporting about 1 million barrels a day to China, more than to the U.S., Chief Executive Officer Khalid al-Falih said.

“We are already exporting more to China than to the U.S.,” he said today in an interview in Davos, Switzerland. “We are prudent and careful about where to invest but our eyes are focused on China and we will continue to look for all opportunities.”

The U.S. imported 1.014 million barrels of oil a day from Saudi Arabia in the nine months through September, according to the Energy Information Administration. China and Saudi Arabia aim to boost trade 50 percent to $60 billion by 2015, the state- owned Saudi Press Agency reported this month, citing Chinese Trade Minister Chen Deming.

Saudi Aramco, as the Dhahran-based company is known, has begun to expand and upgrade its oil and gas production and refining businesses at a cost of $100 billion to tap rising demand in Asia, Oil Minister Ali al-Naimi said in November.

Aramco is investing in refining capacity even given the current poor returns, al-Falih said earlier at a Davos panel. Refiners worldwide have been forced to postpone expansion projects and idle plants in the past year as the global recession eroded fuel demand, squeezing profit margins for oil processors.

Bigger Refineries

The Saudi company, which owns an interest in a refinery in China’s Fujian province, is in talks with China Petroleum & Chemical Corp. to take a stake in a 200,000-barrel-a-day plant in Shandong. It is also expanding its Ras Tanura refinery on Saudi Arabia’s east coast and the Port Arthur plant in Texas, al-Falih said.

“Long term there will be a lot of consolidation and retirement of old and inefficient refineries,” he said in the interview. “We are building refineries that are going to be the most efficient, well-configured and able to deliver the products and we are comfortable that over their life cycle they will be very profitable. We are not designing them for the markets of 2008, 2009 but we are putting them in place for the next three to four decades.”

Aramco has shut in about a third of its 12 million barrels a day of oil output capacity to prevent a price slump. Crude prices rose to a record in July 2008, before tumbling 69 percent by the end of that year as the recession curbed demand. Oil has since rebounded 65 percent, and traded at $73.43 a barrel at 5:04 p.m. London time today.

 

[Dreamer1]

"As much as some try and kid themselves by saying that China is running at 5% GDP growth, the huge consumption of raw material by the Chinese points to a booming GDP."


I believe in what PM to be Li said as revealed in wikileaks

GDP figures are “man-made” and therefore unreliable, Li said. When evaluating Liaoning’s economy, he focuses on three figures:
1) electricity consumption, which was up 10 percent in Liaoning last year;
2) volume of rail cargo, which is fairly accurate because fees are charged for each unit of weight; and
3) amount of loans disbursed, which also tends to be accurate given the interest fees charged.

By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth. All other figures, especially GDP statistics, are “for reference only,” he said smiling

 

[zuoom]

there is demand in China for sure. dun think anyone will deny that. question is, how much?

the 5% CPI as stated by the Chinese Govt. is it low or is it high?

depending on where you are, you will see these sort of things happening. as in trucks queuing up for diesel. then elsewhere, the station is empty. (now, is it because it's out of diesel?)

as for the Mr. Li, i dun think it's unfair for him to look at the 3 key areas. ie: electricity consumption would mean there's production, or more people using it. Rail cargo, especially for the northern provinces is key as that's the main movers of raw materials n goods. (quite true for most part of china actually)

only the last part with the loans disbursed. did they make the differentiations between capital, investment, housing loans? as we have already see how that could overnight literally collapse if the loans are build on top of each other without the underlining support.

 

[GoFlyKiteNow]

"As much as some try and kid themselves by saying that China is running at 5% GDP growth, the huge consumption of raw material by the Chinese points to a booming GDP."


I believe in what PM to be Li said as revealed in wikileaks

GDP figures are “man-made” and therefore unreliable, Li said. When evaluating Liaoning’s economy, he focuses on three figures:
1) electricity consumption, which was up 10 percent in Liaoning last year;
2) volume of rail cargo, which is fairly accurate because fees are charged for each unit of weight; and
3) amount of loans disbursed, which also tends to be accurate given the interest fees charged.

By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth. All other figures, especially GDP statistics, are “for reference only,” he said smiling

The effect of price rise for fuel will itself have a knock on effect on almost
every consumer item and services in China. A 10% increase in fuel price can translate into 50 to 100% increase in other areas. This is one of the reasons for the rapid increase in inflation rates.

 

[syed putra]

f I am not mistaken, petrol and diesel is subsidised in china.
Therefore, near border areas, there is bound to be a shortage due to smuggling of diesel out of china, or they sel to someone who horde the stuff anfd sell at a higher margin fir those who do not wish to queue.