The crude-oil import quota for non-State firms is capped at 9.52 million tons for 2003, compared with 8.28 million tons for this year. The amount accounts for more than 10 percent of China's total oil imports.

The commission said no import limits are in force for the four designated State oil traders, namely Chinaoil, Sinochem, Unipec and Zhuhai Zhenrong.

The import quotas for refined oil products -- including fuel oil, jet fuel, gasoline and diesel -- for the coming year have also increased by 15 percent to 25.3 million tons. The commission said 5.3 million tons, around 21 percent, will be reserved for non-State companies.

In late 1998, the government banned imports of gasoline and diesel in a bid to alleviate oversupply and bail out loss-making refining companies.

China promised to increase import quota when it joined WTO

When it joined the WTO last year, China promised to increase its import quotas for crude oil and oil products by 15 percent each year until the quotas were phased out in 2004.

The import quota for refined products is 22 million tons this year, of which 4.6 million tons were allocated to non-State companies.

But, in the first half of this year, China's imports of oil products fell 24 percent year on year to 7.94 million tons. Crude-oil imports rose 3.1 percent to 33 million tons.

Analysts said the impact of China's entry to the WTO would remain limited at present, as the State-controlled Sinopec and PetroChina -- the nation's two largest oil companies -- control 90 percent of China's refineries and more than 50 percent of the petrol stations. The analysts said that import quotas for non-State companies make little sense, at least for the time being when non-State companies find it difficult to sell their imports.

But officials from PetroChina and Sinopec said they are concerned that profits may drop in the years ahead as the firms risk losing their dominance when the market is completely opened up in four years.

( People's Daily August 2, 2002)