China's fuel majors are to increase the diesel supply to ease shortages at the behest of NDRC.
China's National Development and Reform Commission (NDRC) has demanded that China's two largest oil companies China Petrochemical Corporation (Sinopec) and China National Petroleum Corporation (CNPC) increase their supply of diesel to parts of the country which are most likely to be affected by seasonal shortages.
Affected areas, which are mainly in the low to mid regions of the Yangtze river as well as most southernly provinces, have already seen tight supplies since September and will need the extra fuel for the autumn harvest season.
The strain was felt even more acutely this year after the government cut prices of retail gasoline and diesel early in October in line with falling crude prices. Furthermore, one report conducted by China's Oil Distribution Commission estimates that nearly half of China's privately-owned gas stations do not have guaranteed fuel supplies.
Since the order came from the NDRC, both Sinopec and CNPC - who account for 75% of China's 560 million ton annual oil refinery capacity - have told refineries to run at full capacity.
So far, Sinopec group claims it has sent 64,000 tons to Jiangsu, Zhejiang, Anhui, Hubei and Hunan provinces, and plans to continue increasing oil processing this month.