Domestic gasoil demand from end-users has been dampened by the new regulations for road transportation that were implemented as from Jul 1, 2011, C1 found.
In accordance with the new regulations, local transportation departments crack down on overloading and retrofitted trucks, forcing some truck drivers to suspend transportation or to leave main trunks.
"Transportation costs are so high that it is not profitable at all if our trucks are not overloaded,” said a private transportation operator in Shanxi, "I have stepped to the sideline since a driver will be revoked his business license if he has been caught for overloading for three times."
Also because of the new regulations, some truck owners have idled retrofitted trucks and they have reduced business amid less transportation capacity.
As a result, petrol stations in Guangdong, Shanxi, Shandong, Hebei, Henan and Inner Mongolia etc have all recorded declines in gasoil sales, according to sources with them.
In addition, some transportation operators who had previously planned to buy trucks in the near term have abandoned their plans, said a truck driver in Shandong.
However, the regulations are expected to stimulate gasoil demand from vehicles over the long term, since more trucks will be required.
Gasoil demand from vehicles takes up about 54% of China’s gasoil consumption, C1’s data indicate.
