BP Started Petrol Station Operation with Dongming

BP Started Petrol Station Operation with Dongming

The first petrol station jointly built by BP and Shandong Dongming Petrochemical started operation. This is regarded as the first step of BP’s 1,000 petrol stations construction plan in China.

China has been suffering oversupply of gasoline and diesel for many years, and this leads to the fierce marketing competition among state-owned petrol stations, private petrol stations and foreign-invested petrol stations. According to the statistics of SCI, there are around 108,000 petrol stations in China, and the number of private stations covers around 50.7%.

As an important refining base of independent refineries, Shandong Province is experiencing an evolution in the gasoline retail market. In Shandong Province, the number of private petrol stations takes up around 60% of the total, and the stations under Sinopec covers around 27%.

Previously, if a foreign company has more than 30 petrol stations in China, the petrol stations shall be mainly held by Chinese companies according to the policies. But the restriction was canceled on July 28, 2018. And after that, foreign companies became active in China’s refined oil retail market. At present, BP is running around 740 petrol stations in China jointly with Sinopec and PetroChina. In 2018, BP announced that it would build 1,000 new petrol stations in China in the next five years, including 500 petrol stations to be jointly built with Shandong Dongming Petrochemical.

Actually, on February 2, 2018, BP signed agreements with Shandong Dongming Petrochemical. According to the agreements, the two parties will jointly build petrol stations in Shandong Province, Henan Province and Hebei Province. In 2017, Sinopec and PetroChina started the price war against private petrol stations, and that brought serious impact to private stations. And then, the private companies began to build wide cooperation with each other and with foreign companies to occupy more market shares. The cooperation between Dongming and BP set an example. Dongming has experience in fuel supply, and BP is good at the petrol station operation.

Saudi Aramco is also active in China’s oil refining industry. Fujian Refining & Petrochemical, PetroChina Yunnan Petrochemical and the newly coming Zhejiang Petroleum and Chemical all have cooperation with Saudi Aramco. In addition, Shell (Zhejiang) Petroleum Trade Company got the refined oil wholesale license from the Ministry of Commerce of China in 2018. It means that Shell is allowed to purchase and wholesale refined oil in China. Shell is the first foreign company with this license in China.
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