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Competition in domestic oil refinery industry intensifying

By Li Yan (People's Daily Online)    08:41, September 30, 2017

Analysts say the growing number of rivalries in China’s oil refinery industry has added to competition in the sector, the Securities Daily reported on Sept. 28.

There are now over 100 gas stations jointly invested by homegrown oil refiners and their foreign counterparts, and most of the joint-ventures are distributed in the country’s eastern coastal areas.

Hu Huichun, an oil analyst with www.sci99.com, said more foreign companies may enter the Chinese market, because it is opening up more widely and has rising demand for refined oil products.

In 2016, Royal Dutch Shell launched an independent oil company in east China’s Zhejiang province that specializes in gas filling stations.

In September, British Petroleum’s Shandong branch company was set up with registered capital of $7.2 million. Besides gas filling stations, the company has opened electric vehicle charging points at its gas stations, which the industry says will become a bright spot as more Chinese support new and renewable energy.

New private businesses in China are also intensifying competition in the sector. On Sept.18, a joint-venture was launched by Zhejiang Energy Group and Zhejiang Petrochemical. The joint-venture plans to build hundreds of gas stations by 2020 and be able to handle eight million tons of oil products per year before 2019.

According to statistics, privately-owned gas stations accounted for 40 percent of the total number of gas stations in China by the end of 2016, while foreign-invested ones took up only 2.11 percent.

To gain more market share, China’s three state-owned energy giants—Cnooc, PetroChina, and Sinopec—started a price war in May with their private counterparts. Industry insiders say more price wars are expected in the future as the number of rivals continues to grow.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Hongyu, Bianji)

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