ALTHOUGH PetroChina Co claimed its move to cut street gasoline prices was a temporary and regional promotion, analysts said it might signal the trend of more flexible fuel pricing as competition increases.
　
Usually, PetroChina and rival Sinopec Corp, 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 in Beijing, broke its price alliance with Sinopec. In past years, any rate adjustment was directed by the top planner, the National Development and Reform Commission.

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 (Two 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. 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 southern Guangdong Province and central Hubei Province. However, Sinopec said it doesn't have any similar plans to cut prices.

Source:佚名