BIZCHINA / Oil Prices
State breaks own monopoly in oil trade
By Shan Juan (China Daily)
Updated: 2007-03-26 13:54
China has issued new guidelines on private companies' entrance into crude
and processed oil wholesale business, further breaking the State monopoly
in the market.
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The guidelines in the form of two documents, released by the Ministry of
Commerce (MOC) over the weekend, gives details of how domestic and
overseas companies can apply to enter the crude and processed oil market.
Domestic private companies' applications would need 40 working days to be
processed, while those of overseas ones would need four months.
The rules offer a level playing field to overseas and overseas-funded
companies in the country's wholesale oil sector.
Also, the market access threshold for domestic companies has been largely
lowered. The earlier restriction on the number of gas stations a private
company could own has been lifted.
The guidelines are based on two regulations issued by MOC last year,
which was aimed at breaking the monopoly of State-owed enterprises in the
oil market, Xinhua News Agency has reported. The regulations were in
accordance with China's commitments to the World Trade Organization
(WTO), and opened up the oil market to overseas and domestic private
players from December 11, 2006.
Before that, the government used to control the wholesale crude market
through the country's two biggest oil firms, China National Petroleum
Corporation (CNPC) and China Petroleum and Chemical Corporation (Sinopec).
(For more biz stories, please visit Industry Updates)
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