On September 1, the "2007 High-end Forum on Development of Chinese Oil Distribution Industry" was held in Beijing. Experts attending the forum pointed out that there is still a severe monopoly in the Chinese oil industry and it should be broken as soon as possible.

Zhao Youshan, director of the Petroleum Circulation Committee under China General Chamber of Commerce (CGCC) revealed that the Ministry of Commerce (MOC) has lifted the restrictions on wholesales of crude oil and oil products. But most of Chinese private oil enterprises still find it very hard to survive because of very limited oil supplies and high market-access standards. Statistics show that the number of private wholesale providers has declined sharply from more than 3,340 in 1998 to 663 at present.

An oil businessman from Jilin Province did not have much faith in the newly issued Anti-monopoly Law. He said this law would not have substantial influence on the oil industry. In his opinion, in order to get enough oil supplies, he needs to maintain good relations with China's two dominant oil giants, PetroChina and Sinopec rather than turn against them by suing them for monopoly.

Ren Yuling, a counselor from the State Council, said it is not market competition but government funds, privileges and dominance over resources that have made Chinese monopolistic enterprises strong.

He suggested that the government take decisive measures by selling 10 million to 20 million tons of oil products per year to private oil distribution companies at reasonable prices. He said such amounts, accounting for just 10 percent of China's annual oil product supplies, would not affect the interests of oil giants significantly if it supplied private oil businesses.

For more details, please read the full story in Chinese. (http://www.bbtnews.com.cn/news/cyyj/2681.shtml)

(China.org.cn September 3 2007)