The power cuts began after Beijing announced in August that it would have difficulty reaching energy-saving targets.

In the city of Wenzhou in Zhejiang province, for example, the imposed rationing schedule is one day of electricity, followed by two to four days of no electricity, state-run news agency Xinhua reports.

Research by Sinopec, China's largest oil refiner, shows that orders and sales for leading models of diesel generators soared by 200 percent in October, compared to September. Hence the heavy demand for diesel fuel and the ensuing shortages.

The China Chamber of Commerce for the Petroleum Industry said that more than 2,000 privately owned gas stations in southern China have shut down because of a lack of diesel fuel.

The International Energy Agency estimates the rise in diesel fuel demand will account for an extra 70,000 barrels a day to China's oil consumption from October to February. That's equal to approximately 8.5 percent of the country's total oil demand growth forecast of 818,000 barrels a day in 2010.

To meet surging demand for diesel fuel, China's refineries have been boosting production. PetroChina, the country's biggest oil producer, said it had produced 56 percent more winter-grade diesel fuel by the end of October, compared with last year, China Daily reports.

China Petroleum & Chemical Corp. -- Sinopec -- China's largest oil refiner, said processing this month would rise 10 percent from last year to 583,000 tons a day, the newspaper reports. That exceeds the October record by 5,900 tons a day.

Even with increased production, diesel shortages have triggered a black market, with the fuel selling for more than 1.5 times the legal price in southern China.

"The irrational blackout policy by some local governments is contrary to the energy conservation and emissions reduction target as was set by China's 11th Five-Year Plan," said Zhang Jianyu, China Program manager of the U.S. Environmental Defense Fund, Xinhua reports.

Under the plan, China sought to cut its per unit of gross domestic product energy consumption by 20 percent compared with 2005 levels by the end of 2010.

All went well for the first four years, with a 15.6 percent reduction achieved but during the first half of 2010, energy consumption per unit of GDP increased 0.09 percent, prompting Chinese Premier Wen Jiabao to urge all levels of China's government to work with an "iron hand" to reach energy efficiency targets.

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