Sinopec is cutting fuel prices at some of its pumps in Shanghai, starting from January 1st. The move comes after PetroChina lowered retail prices at 150 of its gas stations in the city.
An oil price war between PetroChina and Sinopec has broken out in Shanghai. On December 25th, PetroChina took the initiative. It cut its gasoline prices by around 0.3 yuan a liter to 4.76 yuan per liter at all of its 150 gas stations in Shanghai.
Sinopec followed suit on Wednesday, announcing plans to cut retail fuel prices by around 0.35 yuan a liter to around 4.71 yuan per liter at its 44 stations in the city from the start of 2009.
The price wars suggest fierce competition in the market, after global crude prices plummeted and China loosened price controls on fuel products.
Crude oil has now fallen below 40 US dollars a barrel, way down from its peak of over 140 dollars a barrel in July. On December 19th, China decided to slash fuel prices by 900 yuan per ton for gas, and 1,100 yuan per ton for diesel.
Local gas station operators say there were already signs of declining prices in October. And with global crude oil prices dropping to their current levels, many private stations in Shanghai had no option but to slash prices in order to survive.
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