Sinopec, PetroChina in Hot Price War in Guangzhou
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PetroChina Co., Ltd. (SHSE: 601857; NYSE: PTR; SEHK: 0857) and China Petroleum & Chemical Co., Ltd. (Sinopec; SEHK: 0386; SHSE: 600028) have triggered a price war in the southern hub of Guangzhou.
By now, nearly 200 gas stations, excluding private ones, have joined the war in Guangzhou, capital of Guangdong Province. Global oil giant British Petroleum (BP) has had more than 400 gas stations in the province, and over 200 of them have reduced prices of some products, including 100 ones in Guangzhou with a reduction range from CNY 0.1 to CNY 0.25.
In Guangzhou, 30 gas stations under the wing of PetroChina have lowered their oil products prices by CNY 0.1-0.2, and 30 ones under the aegis of Sinopec have also joined the war with a range from CNY 0.1 to CNY 0.25.
As a matter of fact, the two Chinese oil titans have been in price war for long. In the eastern metropolis of Shanghai, on December 25, 2008, PetroChina suddenly announced a markdown range from CNY 0.2 to CNY 0.3 a liter for its major refined oil products.
At Christmas, in its 150 gas stations, PetroChina marked down No. 90 and No. 93 gasoline respectively to CNY 4.45 and CNY 4.76 a liter and No. 0 diesel oil to CNY 4.55 per liter in Shanghai.
Shortly after that, Sinopec came up with a markdown plan of CNY 0.25-0.35 a liter in 44 gas stations in Shanghai, CNY 0.35 a liter or 7.2 percent for No. 0 diesel oil, CNY 0.35 a liter or 6.9 percent for No. 93 gasoline, and CNY 0.25 a liter or 7.52 percent for No. 90 gasoline.
On January 1, 2009, the Shanghai-based sales arm of Sinopec conducted the markdown in the eastern metropolis. Only eight hours after that, PetroChina launched a second round of markdown there and the prices of those products were further lowered by CNY 0.10 a liter.
In addition, China accumulatively processed 27.27 million tons of crude oil in November 2008, down 2.3 percent, but turned out 15.86 million tons of crude oil with a growth of 4.9 percent year on year. The country’s gasoline and diesel oil output separately rose 12.8 and 3.3 percent.
In the first eleven months of last year, China yielded 174.09 million tons of crude oil, climbing up 2.5 percent year on year, and the total import and processing volume grew 9.5 and 4.8 percent to 164.51 million tons and 314.93 million tons, respectively.
(USD 1 = CNY 6.84)
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