Truck drivers in Guangdong are struggling to keep their vehicles on the road, as the province suffers its latest diesel shortage.

"I've been to three gas stations across the city today but with no luck," Zhong Xingguo, a driver for a logistics firm in the Huangpu district of Guangzhou, told China Daily yesterday.

"I will have to stay up late tonight or get up early tomorrow and try again."

Zhong said the diesel shortage has been so bad over the past 10 days that his boss has had to turn down orders, especially long-distance ones, and about half of the firm's 100-odd freight vehicles are now off the road.

"The high price of diesel oil on the black market can bite off the lion's share of a logistics firm's profit, and deliveries that have been delayed could lead to lawsuits and compensation payments," Zhong said.

Diesel is selling at up to 6.8 yuan (96 US cents) per liter at some private gas stations in the province, compared with the government's guide price of 5.28 yuan per liter.

Xu Tao, a director of Sinopec's Guangdong branch, the province's key oil supplier, attributed the diesel shortage to high demand from industry and agriculture, the ever-rising international price of crude, and the fact that the wholesale price is now higher than the retail price.

"The rocketing international price of crude oil has made it almost impossible for refineries to make money," he said.

"And with the wholesale price higher than the retail price, the more diesel oil a gas station sells, the more it loses."

The wholesale price of diesel oil is currently 6,500 yuan per ton, while the retail price is 5,983 yuan per ton.

He did not rule out the possibility that some retailers are stockpiling diesel for speculative purposes.

"Sinopec increased the diesel oil supply to the Guangdong market to 1.25 million tons in March," Xu said.

"The pressure of short supply will decrease in late March or early April."

Sinopec has supplied more than 3.5 million tons of diesel since the beginning of the year, 400,000 tons more than in the same period last year.

In Shanghai, the municipal economic commission said in a statement yesterday that the city's overall fuel stockpile is stable, and it has enough diesel to last more than 10 days.

Meanwhile, the government is also appealing to people to "show their understanding regarding the temporary shortages and to preserve order around filling stations".

However, a worker at a Shanghai gas station said: "The supply is less than half the demand. People can't fill their tanks."

(China Daily March 25, 2008)