Fuel Price Reform Made Necessary By Fuel Shortages

BMI View: Reports that China is experiencing diesel shortages in the south of the country are a clear indication that the authorities' current policy aimed at curbing inflation and promoting growth comes at a high cost. We believe that the only long-term solution is to reform the current pricing mechanism to allow for a more efficient downstream industry. The severity of situation leads us to believe that such a move is to be expected in 2012.

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