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MarketWatch: Shell's service stations in SW China face tight supply

Shell's service stations in SW China face tight supply
Last Update: 9:44 AM ET Apr 21, 2006

BEIJING (MarketWatch) — Royal Dutch Shell PLC's (RSDB.LN) gasoline service stations in Chengdu, southwestern China, are mostly facing a shortage of supply, partly due to rising crude oil prices.
“Most of our local service stations are short of 90 RON and 93 RON gasoline, and I'm not sure when the company will resume supply,” a staff from a Shell service station in Chengdu, Sichuan province said Friday.
The shortage was “due to the tight supply (of oil products) at wholesalers in the southwestern region, partly caused by rising crude oil prices,” said Liu Xiaowei, a Beijing-based Shell official.
Shell's suppliers of oil products in Chengdu consist of PetroChina Co. (PTR), China Petroleum & Chemical Corp. (SNP), or Sinopec, and some independent suppliers, she said.
“We are seeking various channels to resume the supply. So far, our local company (Sichuan Shell Fuel Oil Co.) has been resuming filling service for most types of oil products (in Chengdu),” she said.
Shell's service stations in China mostly supply three types of gasoline – 90 RON, 93 RON and 97 RON – as well as diesel.
Shell's service stations in the country's other regions last year also suffered from unstable supply of oil products, partly because “Shell has no wholesale right in China so far,” she said.
China is expected to open up its domestic oil products wholesale market to foreign companies by the end of this year, as part of its World Trade Organization commitments.
“We need to consider the market access criteria” before making any entry decisions, she said.
China's Ministry of Commerce is expected to announce the entry criteria sometime in the middle of the year.
Shell currently has around 70 service stations in the cities of Beijing and Tianjin in northern China, Guangdong province in the south and Chengdu city in the southwest, she said.
Shell has also joined Sinopec in operating around 200 service stations in eastern China's Jiangsu province and plans to build another 500 stations in the province.
-Edited by George Bernard
-Contact: 201-938-5400 End of Story

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