AsianFin -- China’s top state-owned oil companies are racing to adapt to the country’s rapid energy transition, shifting focus from struggling gasoline and diesel operations toward alternative fuels and higher-value chemicals.

PetroChina Co. and China Petroleum & Chemical Corp. (Sinopec) both reported weaker first-half earnings over the past week, with profits hit by falling global crude prices and waning domestic demand for fossil fuels. Executives said they plan to revamp downstream businesses and expand into more specialized products to offset losses.

Sinopec’s net income slumped 36% after operating profit at its refining arm dropped 59% and losses at its chemicals division widened. PetroChina, less reliant on those segments, still saw a combined 19% decline.

Oil refining is now among China’s worst-performing industries, recording losses over the first seven months of the year, government data show. The surge in electric vehicle adoption, along with greater use of natural gas and electrification of transport networks, suggests gasoline consumption has already peaked.

“Chinese gasoline demand will face quite a lot of pressure in the second half,” PetroChina Chief Financial Officer Wang Hua said at an earnings briefing in Hong Kong on Wednesday.