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Petrol traders urge gov't to ease price curbs
Chinese gasoline traders and manufacturers urged the government to ease price controls blamed for shortages in some provinces of the world's second largest oil consumer, the Bloomberg reported Friday.
South China's manufacturing base of Guangdong Province is the worst hit in the fuel shortfalls, with drivers waiting for hours for gas in lines up to a half-mile long, sometimes leaving with empty tanks when supplies ran out. Supplies are also limited in Shanghai and Shandong Province on the east coast and Heilongjiang Province in the northeast. Industry officials revealed, however, that supply is actually "basically enough" to meet demand, according to Bloomberg. But some retailers are limiting sales to avoid losses because they can't pass soaring costs on to customers in a country where the government controls fuel prices. Fuel prices in Guangdong are up 16 percent this year after five increases in four months, lagging behind the 68 percent surge in the price of Dubai crude oil, Asia's benchmark, which reached a record $57.80 a barrel on Aug. 12.
"The problem is not because of oil shortages, but more because the station owners are finding it difficult to operate with retail prices that are lower than wholesale prices. If the oil stations are losing money when they sell fuels, how can they continue to operate?" said Liu Jian, chairman of the Shandong-based Oil Product Trading Association of Qingdao, according to Bloomberg. Some industry analysts echoed Liu's remarks, saying that the supply problem stems from the central government-controlled oil pricing system, which lags far behind changes in the world market. "In the long run, the country needs to float domestic oil prices more closely
to the world level to channel oil consumption into an energy-saving model, which
in return will contain demand and balance the market," said Ni Weidou, chairman
of Tsinghua-BP Clean Energy Research and Education Centre.
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