The Ministry of Commerce has issued the "Regulation of Crude Oil Market Management" and the "Regulation of Refined Oil Market Management" in an effort to further open China's petroleum market to the outside world and promote market-orientated reform in oil distribution.

This is set in the context of China's WTO transitional period having drawn to an end.

The regulations indicate that the government is serious about fulfilling China's WTO obligations.

They also signify the end of the era when the State monopolized the distribution of oil resources, with the State-owned China National Petroleum Corporation (CNPC) and China PetroChemical Corporation (Sinopec) as primary players.

The situation will now arise in which State-owned petroleum giants, transnational oil corporations and privately owned oil businesses are involved in competition.

Some people have long been crying "wolf" as the deadline approached for China to fulfill its WTO commitments to open the domestic crude and refined oil wholesale markets by December 11, 2006, arguing that transnational super players would have an overwhelming impact on the country's oil industry.

True, it is unavoidable that once the State monopoly in the oil market is ended, competition gets increasingly fierce and foreign players snatch a share of the domestic oil market. However, it takes time for overseas oil giants to set up their petrol stations, purchase Chinese gas stations and establish oil storage facilities across the country.

In addition, foreign players must abide by China's industrial policy and regulations on the management of foreign invested companies.

Chinese oil enterprises have enough time to make progress and enhance their competitiveness, thus absorbing much of the impact from external forces.

While overseas oil heavyweights are eager to enter the Chinese market, privately owned oil enterprises in the country are also yearning for the opening of the monopolized oil market.

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