China's Ban on Diesel Exports Likely to Cause Rise in Global Fuel Prices

According to a report issued by Oil N' Gold, China's National Development and Reform Commission (NDRC) recently shut the door on diesel exports as an effort to conserve its domestic supplies of the fuel in the midst of peak consumption during the nation's country-wide springtime plowing. In coming months, China will most likely become a net importer of petroleum fuels for agriculture and other fuel-intensive consumption.

Likely to Affect Global Fuel Prices

As one of the world's largest populations and as a top global consumer of energy, China's decision to vie with other countries as a fossil fuel importer will increase overall demand and will probably show up as an increase in the price of refined fuels.

China's Petroleum Woes

China's recent announcement may come as a temporary salve to its other petroleum-related woes. As diesel fuel costs continue to rise, supply and distribution problems throughout the country have caused fuel shortages and rationing in localized areas.

Diesel Prices: A Trucker's Opinion

While a sharp rise in demand of diesel fuel may understandably cause prices to rise as fuel suppliers ramp up to match this demand, many ground-level users of diesel fuel - such as truckers and commuters - are angered at the continuous steady rise in diesel's at-the-pump cost.

Gary Grey is a United States-based independent long-haul trucker whose very livelihood rides the edge of existence in sharp competition with other transport outfits. Sudden spikes in operational costs, such as those brought on by diesel fuel price hikes, frequently put truckers such as Grey into debt, or, at best, cause them to operate at a break-even margin.

Grey provides his perspective on rising diesel fuel costs in the colorful vernacular by which truckers are so fondly regarded.

"The cost of diesel is damnable," Grey said. "It just doesn't make sense. First of all, diesel fuel is not as refined as gasoline, so it costs much less to produce. Secondly, because it weighs more or less the same as gasoline, it shouldn't cost any more to distribute it. Last of all, a few years ago our beloved former President George W. Bush lowered the overall cetane rating requirement on diesel fuel by several points. So as of back then, it now costs the refineries a hell of a lot less to manufacture our fuel.

"What f---ing sucks is that with this lower cetane rating, we're getting even less g--d--- energy per-gallon for our dollar. So we end up having to buy even more fuel to make up for the inefficiency of George's cheap fuel! It just doesn't make any damn bit of sense"

Grey's mention of cetane rating refers to former President Bush's initiative to lower the chemical standard by which diesel fuel is made. In making the standard lower, the fuel become less expensive to refine. But this practice carries a dark side: The fuel is less efficient and pollutes the air more than its higher-quality predecessor.

"I don't know whether China's involved with all of this." continues Grey as flecks of spit fly from his mouth, "The oil companies will probably use this China thing as an excuse to raise the g--d--- price again. It seems every time a refinery accidentally catches on fire, or a tiny oil line splits loose in Siberia, the stock traders use that as a stupid f---ing excuse to raise the prices again!

"China or not, the fact is that these oil companies are just greedy money mongers. These f---ers keep sucking us common folk dry, and they demand even more of our hard-earned cash every time they raise the damn prices. If anything, they should be giving us a discount for all the good business we truckers have given them over the decades. Where's our thanks?"

References:

* China Bans Diesel Exports, Likely to Turn to Net Importer in Coming Months

* Personal interview with trucker Gary Grey