-->Gas Shortages in China

Rising Price of Oil Causes Severe Gas Shortages in China

News Report, Translated by Eugenia Chien,
World Journal, Aug 18, 2005
“Where can we still get gas?” has become a common greeting among drivers in some parts of China as a serious gas shortage hits Shanghai and Guangdong. As gas prices rise internationally, industry insiders claim that China’s two major oil suppliers, Sinopec and PetroChina, have stopped supplying petroleum and diesel gas to outside vendors, according to the report in the World Journal.

Hundreds of gas stations in Shanghai have no gas supply. In Guangdong province, transportation delays in gas delivery and increased gas consumption have worsened the gas shortage. About 70 percent of gas stations in Shenzhen and Guangzhou, two major cities in Guangdong, are displaying the “No Gas” sign.

Sources in the oil industry told China’s First Financial Daily that the gas suppliers have enough gas reserves, but are not selling to gas stations because of loss of profits. A director at PetroChina said that the company is not refusing to sell gas to gas stations. The company prefers to sell gas to its own gas stations, he said.

But Jiang Jianbing, the director of Shanghai’s Wenfung Gas Import Group said that PetroChina, Sinopec, and other gas companies have stopped supplying gas. Although Wenfung buys gas from small refineries in Shangdong province, even the small refineries are experiencing gas shortage.

Jiang said that the price of diesel in Shanghai have already exceeded official market price allowed by the government, making it more difficult for gas stations to maintain profit.

In answering to outside questioning, the director of Sinopec in Guangzhou emphasized that gas stations have a low gas reserve for security reasons. The gas shortage is a result of increased market for gas and the temporary transportation problem caused by the recent weather.

In the Guangdong province, three recent typhoons have made transporting gas more difficult, exacerbating the severe gas shortage in the province in the last month. According to the Xinhua news agency, China’s state-run news agency, two out of three gas stations in Guangzhou (in Guangdong province) do not have gas for sale. Long lines of cars wait outside any gas station with gas supply.