China Fuel Crisis Spreads, One Killed in Pump Queue -Jim Bai and Rujun Shen

OOILCAP_P1.jpg From Reuters:

China’s worst fuel crisis in two years spread to the capital and other inland areas by Wednesday , and one man was killed in a brawl at a petrol station queue, upping pressure on the government to intervene.

Diesel shortages in China’s political heart, which escaped previous supply crunches unscathed, highlight tensions between the government and its increasingly independent oil firms about who should pay for the country’s generous fuel subsidies.Top refiner Sinopec on Wednesday pledged more supplies and bought additional diesel fuel abroad, but it may fall to Beijing to end the stand-off by raising domestic prices, easing taxes, promising another year-end pay-off — or simply strong-arming suppliers into selling more fuel at a loss. [Full Text]

See also: Beijing raises pump prices as shortages bite by Jamil Anderlini from the Financial Times.

And see: From Burma to Beijing: Asia’s sensitive petrol politics from Christian science monitor.

[Image: Surprised? China’s unexpected announcement Thursday that it was cutting fuel subsidies raised prices by 10 percent. In Shanghai, an attendant pumped gas, by Aly Song from Reuters.]

November 2, 2007 10:25 AM
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Categories: Economy