Gas station service improvement has become a major topic faced by China's oil products market after its opening in the foreign capital, said a senior manager with the China National Petroleum Corporation, China's largest oil producer Wednesday.

Tian Jinghui, Vice President of the Refining and Marketing Company of PetroChina Company Limited, the listed subsidiary of CNPC, said at the China Gas Stations Forum 2005 held in Beijing that fierce competition in China's oil products retailing market is obliging China's gas stations to turn from their traditional operation methods by providing multifarious services.

China opened its oil products retailing market to foreign capital at the end of 2004 and will open the wholesale market at the end of 2006 in compliance with its promise when entering the World Trade Organization.

Peter Ho, BP Retail Business Development Director of BP (China) Holdings Limited said that gas stations with convenience stores have become the major operation mode of over 28,000 gas stations of BP around the world.

A typical BP gas station will have 60 percent of its profits from oil products sale and 40 percent from convenient store operation, said Ho. Ho added that the world oil giant will invest more in convenient store operation in the future.

According to Ho, a new competitor, but also a new potential strategic partner, of global oil operators such as BP are supermarkets or chain stores such as Carrefour and Macdonald's.

Lu Ying, General Manager of Veeder-Root China, said it is a new trend in a mature oil products retailing market like the United States that supermarkets or convenient stores have become the major operation body of oil products retailing.

According to her, there are 170,000 stations in the United States, 117,000 operated by convenient store companies, 34,000 international oil corporations and more than 8,000 by supermarkets.

More operators in the oil products retailing market have made the competition much fiercer and commodity retailing a necessary business of gas station services, she said.

CNPC and the China Petroleum and Chemical Corporation (Sinopec), China's largest oil refinery, are still the major operators of the country's gas stations.

With their deepening cooperation with foreign capitals, China is also seeing a trend of various services in its gas stations except for traditional gasoline sales.

According to Liu Hongshun, a senior manager of BP PetroChina Petroleum Company Limited, a joint venture of PetroChina and BP, among the 435 gas stations operated by the company in South China's Guangdong Province, 285 are equipped with convenience stores.

The sale of such convenient stores in 2005 is expected to reach 160 million yuan (19.8 US dollars) and the profits will be over 28 million yuan (3.5 million US dollars), he said.

However, Liu said the deficiencies in the current gas station construction and security standards are still one of the major factors impeding China's gas stations in keeping up with the world pace.

Source: Xinhua