Mikkal Herberg Comments on China's Fuel Shortage Fears
China Fears Fuel Shortage
05/23/2011
Michael Lelyveld,
Radio Free Asia
China has ordered a halt to diesel fuel exports as it struggles with energy shortages stemming from price controls, experts say.
On May 13, the National Development and Reform Commission (NDRC) announced it would suspend all diesel exports except to Hong Kong and Macao. The agency urged dealers to boost imports and prevent price hikes from hoarding, state media said.
The move is an attempt to keep ahead of the growing impact from power shortages that have spread to some 20 provinces, autonomous regions and municipalities so far this year.
Experience with electricity problems in 2004 and 2010 has taught the government that businesses will start using diesel generators to keep the power on. The result has been fuel shortages, fear of price rises and long lines to buy more.
The ripple effects are the result of the government's reluctance to raise retail power rates as it battles inflation, giving consumers less incentive to conserve.
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Mikkal Herberg is a senior lecturer on international and Asian energy at the Graduate School of International Relations and Pacific Studies, University of California, San Diego. He is also the BP Foundation Senior Research Fellow for International Energy at the Pacific Council on International Policy and also serves as research director on Asian energy security at The National Bureau of Asian Research.
