(Yicai Global) Sept.12 -- Shanghai gas stations of China Petroleum & Chemical --- better known as Sinopec -- have slashed their prices. The cost of 92 and 95 octane gasoline has dropped by CNY1.5/liter, down by as much as 23 percent, the Shanghai Securities News reported today

Outside Shanghai, Beijing's PetroChina and Sinopec gas stations have also been handing out competing discounts. Use of their app nets a CNY0.50/liter discount; discounts of more than CNY1 per liter are also on tap in Zhejiang and Northeast China as refined oil deluges China in an ocean that industry players predict will become the new normal.

The two Beijing-based petro-behemoths' price wars are generally limited to CNY0.10 to CNY0.20 cuts, going occasionally up to CNY0.50 to CNY0.60. These recent discounts of CNY1 to CNY2 with up to 20 percent discount are incredibly rare and a direct result of the domestic refined oil glut.

The retail market for refined oil products is gradually opening up in China, and the competitive edges of PetroChina and Sinopec are blunting in consequence. This price war will thus become the future norm.

"The price difference between the price of the No. 92 and No. 95 octane and the retail price of the gas station goes as high as CNY2,500 to CNY3,00 per ton. This batch price disparity includes a huge price reduction space," said Fu Bingrong, chairman of private oil company Shanghai Peng Dun Electronic Commerce.

"With the quality and quantity of oil being equal, Sinopec and PetroChina can only regain their share if they slash prices," he added.

Editor: Ben Armour