Chinese oil firms are launching digital platforms for consumers such as taxi drivers, truck companies and private car owners to buy fuel speculatively for use at a later stage, stoking a growing trend in China's fast-growing vehicle market.
Chinese oil firms are launching digital platforms for consumers such as taxi drivers, truck companies and private car owners to buy fuel speculatively for use at a later stage, stoking a growing trend in China’s fast-growing vehicle market.
The country’s road transport sector has become the biggest in the world, with some 150 million cars in use and monthly growth of over 2 million new vehicles.
With such a huge market, at least two oil companies are pushing to create new opportunities by offering motor users the chance to speculate on changes in oil prices.
“Until now, personal users could only buy fuel at the gas station and if they thought that prices were at very low levels and wanted to secure or hedge their fuel at low levels, there was no way to do that,” said Stephen Qi Jun, chief operating officer at Hong Kong-based Brightoil Petroleum.
“We are launching this new innovation to help millions of consumers hedge their own consumption of fuel,” he said.
Cooperating with a regional bank that it did not name, Brightoil said on Tuesday it had officially launched a digital retail oil trading platform in China. The company is usually more active in wholesale physical oil trading.
“You can use a (smart) card at the gas station to buy gasoline, or if you think that the value will increase in the future, you can keep the volume and sell it in the future if prices rise,” Qi Jun said. “It’s exactly like an investment.”
Dongming Petrochemical is also entering digital fuel retailing, according to a senior executive at China’s largest independent refiner.
($1 = 6.4891 Chinese yuan renminbi)