China, Asia's second-largest oil consumer, will allow non state-controlled companies to import about 27 percent of the country's gasoline, diesel and other fuels in 2003 as part of its pledge to follow WTO rules, said the State Economic & Trade Commission.
China will also raise imports of diesel, jet fuel, gasoline and other types of oil products by 15 percent to 25.3 million tons next year from 22 million tons this year, the commission said in a statement.
Four state-owned companies control about 79 percent of the country's total fuel imports. In 2003, that will be reduced to 74 percent or 14.7 million tons of such fuels. China Petroleum & Chemical Corp (
"This is another step in China's plan to liberalize its oil market," said Gordon Kwan, an analyst with HSBC Securities in Hong Kong. "Sinopec and PetroChina must work harder to lower their oil processing costs to compete with foreign refiners."
Refiners in Asia, such as Royal Dutch/Shell Group in Singapore, have seen profit margins fall because of an oversupply of fuels. Improved access to China's market may help earnings at the refiners because the country is Asia's fastest growing energy market. Beijing will stop setting quotas for oil product imports from Jan. 1, 2004, which will likely lead to more competition for Sinopec and PetroChina.
"China's refiners are much more efficient than they were two years ago, but are not yet ready to take on foreign competitors," said HSBC's Kwan.
China National United Oil Corp (
China will also allow non-state companies to import up to 9.52 million tons (70.9 million barrels) of crude oil next year, or 15 percent more than this year. The Ministry didn't say how much crude oil the country plans to import next year.
The rest of the quota will be allocated to China Petrochemical Group (
China's crude oil imports in the first six months rose 3.1 percent to 33 million tons.
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