Chinese government's energy policies lead to diesel shortage

Major disruptions in the supply of diesel fuel have forced many businesses in China to grind to a halt as they await governmental moves on the shortage. A combination of factors - including burgeoning demand and governmental rationing - contributed to the shortfall.

The supply shortage is actually the result of other energy rationing the Chinese government imposed. The government instructed businesses to meet energy-saving goals that forced many businesses to buy diesel generators to deal with the power cuts. The move boosted already sky-high demand while exposing the rudimentary tools the Chinese government utilizes to regulate markets.

Companies across the country are experiencing slowdowns as a result of the shortage. One such company, Tianbang Logistics Co., a trucking company, reports that its deliveries have been held up by more than two days at ports in Shanghai while its drivers await fuel in massive lines.

This is not the first time the government has disrupted the economy through its energy policies. Ken Pang, an economist for Citibank, tells the New York Times that the only way to reverse the fuel crisis is to "begin supplying more power."