RUNNING LOW: Drivers crowding around a petrol kiosk in Hangzhou city to await their turn (above) while, in Jiangxi province, fuel containers were used by motorists to mark their place in a queue at an outlet. -- PHOTO: AP, AFP

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The shortages that occurred in at least three coastal provinces stoked fresh speculations that Beijing may need to further lift its regulated prices to appease loss-incurring refineries and bring in more imports to boost stocks.

Petrol stations run by Sinopec Corp or PetroChina in Ningbo, a city in Zhejiang province on the east coast, either put out signs saying 'diesel ran out' or made lorry drivers queue for hours for a maximum refill per visit of 200 yuan (S$39) worth of diesel, or just under 40 litres, drivers told Reuters.

At some outlets, police helped maintain order as angry motorists refused to stop pumping after the prescribed limit, said one driver.

Mr Chen Xiaoxiang, a manager at a logistics firm, said he suspected operators were hoarding oil in anticipation of more price rises.

'Everybody says that prices are going to rise again, that's probably why these stations are holding back supplies,' he said.

STILL NO PROFIT 'The total amount of supply is short as many local plants are still losing money at this oil price.' A SINOPEC OFFICIAL in Guangzhou, referring to the price of diesel after Beijing increased fuel rates by 10 per cent on Nov 1.

Some independent petrol stations were illicitly quoting their pump rates at 6.19 yuan per litre, or 20 per cent above the government-set retail rates, implying market speculation over another price increase by that margin, industry officials said.

Sinopec fuel marketing officials in eastern Shandong and southern Guangdong provinces reached by Reuters said sporadic diesel rationing was also taking place in their regions, both manufacturing hubs and top fuel users in the country.

Following weeks of widespread shortages last month, China lifted retail prices of petrol and diesel on Nov 1 after holding off for 17 months because of concerns that the rise would stoke already-high inflation and popular resentment.

Beijing's hand was forced after rationing, which began in the southern provinces and spread to Shanghai, created long queues at petrol kiosks and affected transportation-related businesses. A man was even reportedly killed during a brawl over queue-jumping at a service station.

State refiners resumed normal supplies almost immediately after the price increase, but its effects have worn off quickly. As global oil charges towards US$100 (S$144) a barrel, industry officials said the 10 per cent rise was too small to narrow the gap with international markets, leaving refiners still in the red.

The adjusted diesel prices remained a third below those in Singapore, though petrol prices are now on par with what US motorists pay.

'We haven't seen supplies improve significantly,' said a Sinopec executive based in Jiangsu province.

'The total amount of supply is short as many local plants are still losing money at this oil price,' said another Sinopec official, based in southern metropolitan Guangzhou.

Even as China is boosting diesel imports to a three-year high, officials said the amount may still be too little to cover the shortage as refiners cut back production to trim losses.

Beijing may have to raise prices further to persuade the country's independent oil processors - privately or locally owned operations that supply up to 15 per cent of the world's second-largest oil market - to reverse drastic production cuts implemented in response to record-high world oil prices.

But the government's quandary between ensuring adequate fuel supply and controlling inflation was highlighted on Saturday when three people died in a stampede in south-western China as they scrambled for cut-price cooking oil, prices of which have soared by more than a third in the past year due to inflation.

REUTERS