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Drivers get a choice at the pump
By Si Tingting (China Daily)
Updated: 2009-03-02 07:57 Zheng Yuguo, 35, lives in the northern part of Beijing, but he fills his car's gas tank at a Royal Dutch Shell service station in a western part of the town.
Zheng said he does not regret trying the "exotic" gas station for the first time a year ago. "The service people were friendly and their convenience store always offers discounted goods, such as milk and bottled water." "But most importantly its fuel is often a bit cheaper than at Sinopec or PetroChina," he said. "The detour I make is well justified."
According to a survey made by China's major Web portal Sohu.com, less than half of respondents care about service quality at their gas station. Overseas companies were allowed to start selling refined oil products in China on Jan 1, 2007. The rule, issued on the eve of China's fifth anniversary as a WTO member in December 2006, let BP, Exxon Mobil retail in China. The government would open up the oil product distribution market further in accordance with WTO rules, Vice-Minister of Commerce Jiang Zengwei said in January 2007. The Chinese government changed the nation's pricing system for oil products in January, moving it closer to the global level. A market-based ceiling that takes into account the cost of crude oil replaced a guidance band for retail fuel prices. Analysts said the new mechanism, which guarantees an "appropriate margin" for oil refiners, may accelerate foreign oil companies' expansion into the Chinese market. "The liberalization of prices will improve the profitability and may increase the interest of foreign oil companies," said David Fridley, a researcher with the California-based China Energy Group. Total-Sinochem Fuels Co Ltd, a joint venture between French oil giant Total and the fourth biggest Chinese oil company, Sinochem, aims to add 500 service stations in China under a 2005 accord. Several of their stations already set up in Beijing were temporarily closed in the first half of last year as they suffered from price caps on gasoline products that kept them from passing high crude costs on to customers, according to a recent report by China Finance Information Network. Sinopec and PetroChina had government subsidies to cover most of their losses. (For more biz stories, please visit Industries)
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