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Price of LPG standardized in Shanghai

By Qian Yanfeng (China Daily)
Updated: 2008-06-17 10:43

A man fills up his motorcycle yesterday, at an LPG gas station in Shanghai. [China Daily]

The price of liquefied petroleum gas (LPG) in Shanghai has been raised and standardized for motorbikes and taxis in a bid to maintain supplies, after several suppliers went out of business due to soaring costs, the local government said yesterday.

The price for both vehicles is now 4.7 yuan (68 cents) per liter, up from 4.2 yuan for motorbikes and 3.6 yuan for taxis.

According to a statement on the municipal government's website, the increase comes after several months of dwindling supplies and is designed to offset suppliers' high costs. To compensate for the hike, taxi drivers will be given bigger subsidies, it said, without elaborating.

As a result of global oil price rises, over the past two years, the number of LPG filling stations in Shanghai has fallen from about 100 to 36, an official surnamed Chen who works for Shanghai Xinao Jiuhuan Vehicle Energy Co Ltd, said.

"Over the past three years, one of our stations on Jiangsu Road lost more than 3 million yuan," Chen said.

For every ton of gas sold, the company loses more than 1,000 yuan, he said.

The problem is that the price of oil in China is much lower than the global price, Chen said.

While the government subsidizes major oil companies, it does not help the smaller players, he said.

"As a result, many small gas stations have been driven out of business.

"The more customers we serve, the more money we lose." Chen said, adding that the number of customers he sees at the station he runs on Wuzhong Road has tripled over the past few months.

Local woman Shou Xueqing said the demand for LPG is so high that she is glad when it rains, because that means she doesn't have to wait as long to fill up.

"When it rains, I don't have to wait for nearly an hour to fill my motorbike with gas," the 50-year-old said.

On days when the weather is good, the queues can be up to 200 m long, she said.

Liang Jin said he often struggles to find LPG, and once spent an hour looking for a gas station.

"It surprised me that so many of them have closed," he said.

Zhang Shurong, secretary-general of the Shanghai Energy Research Society, said Shanghai authorities began promoting the use of LPG vehicles in the late 1990s out of environmental concerns.

LPG is generally regarded as a clean energy source with a lower carbon/hydrogen ratio, which produces no smoke.

In 2006, the city government banned the use of petrol and diesel powered motorbikes.

"It would be a pity if cars and motorbikes had to resort to using petrol again due to gas shortages," Zhang said.

"The government should build more gas stations to ensure there are ample supplies."

Chen Qiwei, a spokesman for the municipal government, said: "The government is working to ensure the gas supply and local people will also be provided with an updated list of gas stations in the city."

The government is also ready to increase subsidies for gas companies and strengthen the monitoring of gas stations, he said.