China’s Top Refiner Seeks Transformation amid Falling Fuel Sales

The world’s biggest oil refiner, China’s state-held Sinopec, is looking to transform its business as domestic fuel sales crumble amid the electric vehicle boom. China Petroleum & Chemical Corporation, as Sinopec is officially known, will be allocating more capital to new energy and chemicals by the end of the decade to grow revenues and profits amid the lowest domestic fuel sales in China in nearly a decade.

“As the company grows in scale, its ability to respond to market changes becomes inadequate, and the 'big company syndrome' remains to be overcome,” Sinopec’s chairman, Hou Qijun, who was appointed a year ago in the role, wrote in a magazine published by China’s powerful State-owned Assets Supervision and Administration Commission (SASAC), as carried by Reuters. This weekend, Sinopec reported an increase in net profit for the first half of 2026, but flagged falling domestic fuel sales, which have been weighing on the company’s earnings for two years now. “Due to the dampening effect of high oil prices on demand and accelerated substitution by new energy, domestic refined oil products consumption declined by 8.6% year on year, among which gasoline decreased by 7.9%, diesel decreased by 11.5%, while jet fuel (kerosene) rose by 1.3% driven by holiday travel and the recovery of international routes,” Sinopec said in its press release.

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