Fuel rationing hits China

As China's oil refineries struggle to keep meeting supply demands, petrol stations in Shanghai and in the provinces of Jiangsu, Zhejiang and Fujian have announced petrol rationing plans, which are expected to last until the end of year.

Reports from the affected areas say that some petrol stations have restricted customers to a maximum of 100 litres of gas oil per visit, while others have a max limit of 150 yuan worth of fuel. The rationing has so far been applied to gas oil and not gasoline, despite the product experiencing a boom in demand due to the rapid increase in cars on China's roads.

According to an unnamed Sinopec Corp official, this rationing is the result of "an increasing supply/demand imbalance. Refineries are having difficulty pumping oil fast enough to meet demand while stocks remain very thin."

Other analysts placed the blame on Sinopec and PetroChina underestimating that the pick-up in supply had lagged behind rises in demand.

Plans are underway to import crude from Saudi Arabia and West Africa but these incremental supplies would be available until the second half of December.