Peng Youbin had to ask for help from security guards at a nearby company to help direct traffic yesterday while several trucks lined up for a refueling at the Chalong Gas Station that Peng manages in the Baiyun district of Guangzhou.

"The long line of trucks, which resulted from the increasing shortage of diesel oil, has caused traffic problems at the station," Peng said.

Peng explained that the station's diesel-oil supply has been tight for about a week.

"There were only about 50,000 liters of diesel oil supplied a day at the station," he said.

Like Peng, many traders in the Pearl River Delta cities, including Guangzhou, Shenzhen and Dongguan, have been seriously hit by the diesel-oil shortage in the recent week.

"Driven by increased demand for agricultural use, supplies of diesel oil have been very tight in the Pearl River Delta region," said Yao Daming, director of the Oil Products Department of the Guangdong Oil and Gas Association.

Yao also attributed the shortage pressure to the increasing international oil prices and the production suspension at domestic oil refinery plants.

"Also, there was an abnormal pricing situation - the retail and wholesale prices weren't balanced," Yao said.

According to Yao, the retail price for diesel oil is currently about 5,980 yuan per ton at most gas-refueling stations, but the wholesale price has been as much as 6,500 yuan per ton.

"As a result, some traders are just not willing to sell diesel fuel, as they cannot afford to pay the higher wholesale prices," Yao said in an interview with China Daily.

However, an unnamed manager with the Guangdong branch of Sinopec - one of the two major oil companies in China - told the Guangzhou-based Yangcheng Evening News that the current diesel shortage wouldn't be as serious as two years ago, when the Pearl River Delta region was hit by a nationwide oil shortage.

According to the manager, Sinopec has a reserve supply of more than 500,000 tons of diesel fuel in Guangdong, or enough to meet about 10 days worth of demand.

"The situation will improve shortly, as we have also introduced up to 120,000 tons of diesel to the province," the manager said.

(China Daily HK Edition March 19, 2008)