China's Power Shortage Worsens... Diesel Fuel Supply Also Faces Difficulties

A view of the Wujing Coal-Fired Power Plant in Shanghai, China. China has been suffering from the worst power shortage in the past decade. [Image source=Yonhap News]

China, facing worsening power shortages due to unstable coal supply, is reportedly also experiencing difficulties in diesel fuel supply. Diesel fuel is mainly used as fuel for freight trucks.

On the 27th, China's economic media Caixin (財新) reported that diesel supply at gas stations across China has been unstable recently, and this situation may continue for several months.

According to Caixin, a truck dealer in Hebei Province said that local gas stations are limiting diesel sales to 100 liters per truck.

A truck driver in Fuyang City, Anhui Province, also reported that in recent days, gas stations have been selling only 100 to 300 yuan (approximately 18,000 to 55,000 won) worth of diesel to each customer.

Diesel prices have surged since last month. The ex-factory price of diesel in the Shandong area rose 55%, from 5,500 yuan per ton in early September to 8,600 yuan recently.

This is interpreted as a result of Chinese petrochemical plants recently reducing the production ratio of fuel oil and increasing the production ratio of chemical products, as well as production disruptions caused by power restrictions that began in earnest in September.

There is also analysis that the widespread power supply restrictions have intensified the diesel shortage as many factories have been operating small diesel generators on their own.

Due to worsening coal supply shortages for power generation caused by conflicts with Australia, at least 20 provincial-level administrative regions including Guangdong, Zhejiang, Jiangsu, Liaoning, Jilin, and Heilongjiang have been experiencing restricted power transmission, mainly targeting industrial electricity.