Industrial diesel sales slump as Chinese consumer class uses more gasoline.
According to recent data from CNPC, PetroChina and CNOOC, sales of diesel products - typically used in industrial processes - fell by around 6% in the first half, its lowest level since 2010. PetroChina cut diesel production by a significant amount to accommodate the drop.
Meanwhile, Sinopec, Asia's largest refiner, saw gasoline sales jump by 8% during the same period, and both Sinopec and PetroChina saw gasoline sales increase by 10% year-on-year. Demand for kerosene, typically used for jet fuel, has also grown exponentially as increasingly affluent Chinese consumers travel further afield.
With profits falling sharply on low commodity prices (PetroChina's net profit plummeted 63% in the first six months) oil companies are now adjusting to a 'new normal' mode of growth, seeking synergies and new revenue streams elsewhere.
Sinopec has teamed up with Tencent and is increasingly looking to its gas stations to deliver retail sales growth. The oil giant claimed non-fuel retail sales surged 85% year-on-year to 13.3bn yuan ($208m) thanks to drivers picking up drinks, snacks and other sundry items at its stations.
The data show China is moving away from an industry-led economy towards a more balanced consumption-driven one.