Automologist MAC highlights a problem that could spread to the rest of the world.
Across the world’s second-largest economy, lights are dimming and roads are becoming less busy as diesel fuel rationing is implemented in an attempt to preserve supplies and stop spiralling prices. There are reports on Weibo of truck drivers having to wait for days to get a tank full in many parts of the country.
It is not just the diesel that is a problem. China is currently in the middle of a massive energy squeeze as dwindling supplies and massive price increases have left reserves of coal, natural gas and diesel at perilously low levels. Factories are being shuttered and homes are being left without power and all at the start of winter, which can be pretty brutal particularly in the north of the country.
The diesel crisis will impact long-distance trucking most of all. This in turn will affect goods meant for external markets and thus the global supply chain seems like it is about to take another hammer blow. It is unclear how long this crisis may last but there are already fears that shops in Europe and Americaland may well be bare at Christmas.
The price of diesel in China has soared by 30% since the start of the year and now stands at USD1.17, but further bad news is on the way as refinery gate prices have spiked by 55% since September alone. The cause of the problem is firmly rooted in the lack of coal and natural gas supplies. Factories have been clamouring for diesel fuel as national power outages have had companies and households alike turning on their diesel-powered generators for temporary power supplies.
Presently, all fossil fuel is under pressure and has undergone what is described by some as a ‘Price Renaissance’ driven more by lack of investment as investors have shunned the now unfashionable power source. Sadly, though, investment and development of renewables coupled with windless Europe and waterless South America and it may well be that those blackouts predicted by British MPs back in July of this year are starting to become a reality.
All of this is happening just as the COP26 Climate Change conference begins in Glasgow and has allowed the fossil fuel lobby to crow that shifting to renewables too quickly could be disastrous. Not sure I agree with them, but it would appear that the path to net-zero will not be an easy one.
WHAT IS COP26? COP stands for Conference of the Parties and is attended by those countries that signed the United Nations Framework Convention on Climate Change (aka UNFCCC), which was a treaty agreed upon in 1994 and signed in Berlin in 1995. This, of course, is the 26th meeting. So now you know.
