Private and foreign-funded gasoline stations are challenging State-owned stations with discounted rates after the national cost of fuel hit a record high on Tuesday.

The National Development and Reform Commission raised the wholesale prices of gasoline and diesel by 480 yuan per ton each on Tuesday.

State-owned companies Sinopec and China National Petroleum Company (CNPC) responded by increasing retail gasoline prices at the government suggested rate by 0.38 yuan per liter. The benchmark price is now a Beijing record of 6.66 yuan per liter.

However, foreign gasoline stations TOTAL and Shell offer their No 93 gasoline price at a discounted price of 6.46 yuan per liter on Tuesday.

Li Weihua, manager of the Huandao gasoline station near Jiuxianqiao Bridge, told METRO: "We have to depend on discounts to attract consumers."

He said they planned to raise their prices to 6.3 yuan per liter but would not specify0 a date.

Tengyuan gasoline station in Chaoyang district, another private company to offer low prices, sold No 93 fuel at 6.26 yuan per liter on Tuesday, up from 5.88 yuan.

"All the stations nearby are offering discounts because competition is so intense," the gasoline station's manager A Laishun said yesterday.

Despite discounts from private companies, some drivers continue to prefer Sinopec and CNPC stations.

"Sinopec and CNPC stations are everywhere and I can easily find one," said Yi Gang, an SUV driver who claims to spend about 100 yuan on fuel every day.

There are over 150 Sinopec stations in Beijing. Renfutong Commerce Company, the parent company of Tengyuan gasoline station, has only 13 stations in the city.