According to this website, 1 metric ton of gasoline is 1356 liters or 357.8
Prior to this price increase, the Chinese refiners [such as China Petroleum & Chemical Corp. (NYSE:SNP), and PetroChina Co. Ltd. (NYSE:PTR)] took a loss on each liter of gasoline and diesel they sold. Although they receive a subsidy from the government, it has not kept up with the rising price of crude. As any rational, profit-maximizing business would do in this situation, they reduced output, resulting in lines at the pump. The New York Times had an excellent report on the situation. One thing to keep in mind is that while high prices in general attenuate demand, since Chinese refiners weren't at full capacity (and presumably now will be), it's not clear that crude demand would immediately be lowered.
I'm very heartened by this development on many levels. It was inevitable, although many thought
On a more personal level, I have been buying GuShan (NYSE:GU) a Chinese biodiesel company that I mentioned in passing in the post on Darling International (NYSE:DAR). GU is on pace to increase its production capacity to 400,000 tons in 2009 (corporate presentation). I have been averaging down (yeah, I know) lately as it dropped in anticipation of the lock-up period expiring. GU is now up over 16% on nearly four times average daily volume. It has been volatile, but I see it going much higher. For one, Chinese diesel prices are still below international levels. As stated in the New York Times article, the quality of Chinese diesel is appallingly low. On the other hand, GU's products are much cleaner and should be in demand when
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Disclosure: The author owns GU.