Beijing – The energy crisis jolting China’s economy intensifies. Rising fuel demand, surging rates and simultaneous scarcity have hit many Chinese provinces with power shortages. Chinese industries had taken support of generators for shuffling a way out. However, the usage of these diesel-powered generators has led to a shortage of diesel in China now, which as a solution, is being rationed. Besides, while rationing hits vehicles transporting raw materials along with finished goods, it is likely to have an acute impact on the supply chain and the economy.

Over the past few months, China has been facing frequent power shortages. This has impacted the manufacturing sector, which is the backbone of China’s economy. Many factories have also shut down. However, several factories in the power-supplied areas have opted to continue working with the help of generators. Demand for diesel in China has suddenly surged on a large scale due to the use of diesel for these generators. Diesel production has remained limited as the Chinese systems could not predict it. However, with the increased demand, the supply of diesel is restricted at several fuel pumps.

Besides, China has started rationing diesel as its supply is declining. In Hebei province, truck drivers are being merely given 100 litres of diesel at the pump; it amounts to barely 25 litres in other provinces. Information has surfaced through other media alongside social media that the truck drivers of some areas had to wait several days to refuel the diesel. Truck drivers are also complaining about paying additional 100 to 300 yuan to fill diesel at some fuel pumps.

The impact of this diesel rationing has started showing in China’s economy. This includes a large number of diesel-powered trucks and other vehicles in China’s internal supply chain. However, rationing has disrupted the supply chain, directly impacting the manufacturing sector. Many factories are facing delays in getting raw materials which stagnate production. Diesel rationing has also affected the use of generators. Hence, this has delayed production. Moreover, transporting finished goods is also difficult as there is not enough fuel available for the transport trucks.

China’s manufacturing sector and industry were already in crisis due to power shortages. So, the crisis continues to intensify with the addition of diesel rationing. Concerns are being raised that the repercussions will be noticeable on the global supply chain, including China’s economy. Analysts claim that the blow may hit the global economy trying to recover from the Corona outbreak. Meanwhile, the fuel shortage status generated on an international level could continue for a few months, Oilprice.com has reported.

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