China fuel shortage crisis escalates; one killed in riot

In China, fuel riots have begun because of shortages. The shortages are affecting Shanghai, the southeast coastal provinces, and are spreading to the interior. Diesel is fixed-priced at $2.42 in China, about one third of the price in European markets, and fuel companies are getting squeezed by soaring crude oil costs, leading to production cutbacks and allocations. Prices have not been raised for 17 months despite crude oil rices nearly doubling.  Meanwhile, ethanol producers are also under pressure in China from high costs, and from a government shutdown of new ethanol production projects owing to the effect of ethanol demand on food prices.

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