There have been a few articles here and there in the Asian press about the gas shortages in Mainland China but by and large it has not been widely reported. I read the few articles I found with passing interest, since I am after all one of those crazies who drives in Shenzhen. Never really paid much attention to the issue, until yesterday when I experienced the gas shortage issue first hand.
Driving home after our Thanksgiving dinner last night, the light indicating low fuel came on, we headed to our usual filling station only to find it roped off and the workers all sitting outside. I immediately recalled the few words I had read about the gas shortages and thought out loud maybe the station down the road will be open. Well, apparently it has been awhile since we have driven or ridden our bikes around the mountain, we were surprised to find that gas station not only closed but also sitting behind concrete walls that had been erected and painted indicating the location of the new underground subway station. After finding another closed station and two other stations, one of which was only servicing buses and the other trucks, that had lines down the street we wound up back near where we started. The gas station we passed as we left the hotel was not only open, but had fuel and virtually no lines.
Why the gas shortage? From what I remember reading, the Chinese government sets the selling price of fuel and the refineries lose money producing and selling fuel at the state mandated prices. Therefore, the non state owned refineries have stopped refining fuel and the state owned refineries have slowed production. Two weeks ago, the government raised the price but that few percent increase was the first price increase in almost a year and half. At the current price of CNY5.6 a liter that equates to a little less then $3USD a gallon. Prices most Americans would be happy paying to fill up their cars.
While the retail selling price of fuel is capped, the Chinese government gives subsidies to many. Taxi drivers who see their take home pay decreased due to the rising fuel costs; dividends and other lost revenue payments are made to state owned refineries who must sell at the state mandated price; bus companies since ticket prices are set by the local government and not based on reality; employees of the gas stations that are closed continue to show up to work and get paid just as if they were actually doing something.
Supposedly the theory is that retail fuel prices can’t be increased otherwise the average working man will feel the effects in the prices of the consumables that he buys. I would argue that if gas stations can be segregated by who they provide service to then they should also be able to be segregated by pricing. Maintain mass transit prices by charging buses one fuel price and base that price on the highest allowable bus ticket price that maintains social harmony without any subsidies back to the bus companies. Do the same for taxis and trucks that move domestic goods. For private drivers, charge market prices that allow for market fluctuations and a reasonable profit for the refineries.
Then again, what do I know? Only thing I can be certain of is not to count on having a foreigners only station.
