China's oil giants in gas pump price war

China's oil giants in gas pump price war

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Chinese state oil giants Sinopec and PetroChina are waging war at the nation's gas pumps, slashing prices at unprecedented rates in an effort to reclaim sales lost to private local and foreign rivals in the $440 billion retail fuel market. The rare price war kicked off in late March as Sinopec reported first quarter retail sales had slid to a three-year low. Spurred by a glut of fuel, Sinopec started offering hefty discounts in response to ad-hoc but frequent promotions by independent petrol station operators. PetroChina swiftly joined in, triggering a ferocious battle against independents and international firms including Shell and BP, said three state oil sources involved in retail fuel marketing. According to Reuters, the heavy discounting is now spreading from the most heavily oversupplied provinces in China's north, squeezing fat retail profit margins in the world's No. 2 fuel market.