The government has approved 24 more companies to run the
wholesale business of oil products. It is the first time in four
years for the government to issue such licenses.
This is another move for the government to open up the
once-tightly controlled market to domestic players before it is
completely exposed to foreign giants in 2006 under China's
commitment to the World Trade Organization.
An official from the Ministry of Commerce said the licenses were
released in late September, and more wholesale licenses are
expected to come out in following months.
The official, who is involved in supervising the business,
indicated that some of the 24 companies are private companies,
including the domestically listed Hubei Tianfa Group, which is an
oil products trader.
Some others are affiliated with Sinopec and PetroChina, the
nation's largest two oil companies.
The official declined to provide the names of the companies.
In a market overhaul in 1999, the government recalled thousands
of wholesale licenses for refined oil products and consolidated the
business into PetroChina and Sinopec. The government hopes the move
could help the two companies get a better grip of the market and
underpin the prices to sustain the revenues of their lumbering
refineries that contribute the bulk of tax revenues to the
government.
Experts said the market will not be reshuffled with the
participation of the new players as PetroChina and Sinopec still
control the most of the oil supply to wholesalers.
(China Daily January 12, 2004)