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PetroChina's price drop fuels talk of change
(Shanghai Daily)
Updated: 2007-03-16 08:56

UBS said the PetroChina cut was mainly pressured by a similar move from France's Total SA, which has entered the Beijing pump station market under a joint venture with Chinese partner Sinochem Corp.

The Total-Sinochem fuel venture has offered a discount of as much as 0.5 yuan a liter in Beijing in the beginning of this year as it inaugurated new pump stations.

PetroChina's move could trigger a nationwide price cut with Sinopec and force other participants to follow suit, but it will be some time before we know what effect this will have on stock earnings of PetroChina and Sinopec, analysts say.

Some similar fee cuts have already been reported in PetroChina stations in southernGuangdongProvince and centralHubeiProvince. However, Sinopec said it doesn't have any similar plans to cut prices.

As PetroChina has more than 10,000 petrol stations across the country, against more than 40,000 stations owned by Sinopec, the price cut is also seen as a move by PetroChina to expand its share in the terminal market.

However, because the price war has drawn countrywide interest, the fact that Sinopec and PetroChina will still dominate the domestic-fuel-sales market hasn't changed, experts said.


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