BIZCHINA> Opinions
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BIZCHINA> Opinions
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PetroChina's price drop fuels talk of change
(Shanghai Daily)
Updated: 2007-03-16 08:56 Although PetroChina Co claimed its move to cut street gasoline prices last week was a temporary and regional promotion, analysts said it might signal the trend of more flexible fuel pricing as competition increases.
Usually, PetroChina and rivalSinopecCorp, which dominate China's fuel-sales market, set the same gas prices. Independent pump-station operators are forced to offer the same prices as they are constrained by PetroChina and Sinopec in fuel supply. However, PetroChina's month-long discount program, starting last Thursday in about 100 of its select stations inBeijing, broke its price alliance with Sinopec. In past years, any rate adjustment was directed by the top planner, theNational Development and Reform Commission. "This is a promotional event, aimed to reduce our inventories in the north and return some profit to our customers," aHong Kong-based spokesman for PetroChina said. "It won't be developed as a nationwide program." One analyst said it was the weather that led to PetroChina's increasing inventories in Beijing. Some of PetroChina's fuel cargoes to the south were delayed due to the cold weather. PetroChina cut pump prices in Beijing by between 0.05 yuan and 0.2 yuan (2 US cents) a liter, depending on their locations. That's about a reduction of two percent to five percent, according to UBS AG. This could boost sales volume by up to a third at discount PetroChina stations, local Beijing media quoted industry sources as saying. (For more biz stories, please visit Industries)
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