More refiners allowed to import oil

The State Council, China's cabinet, will grant crude oil import quotas to "qualified" refineries, which experts say is a step forward in trimming large State-owned refiners' import monopoly.

The No 83 Document from the cabinet, issued on July 27, mainly focuses on promoting imports and exports.

The document said the central government may grant oil import rights to more refineries beyond the dominant companies, taking into account standards for environmental protection, security and energy consumption during the refining process.

In China, five State-owned companies have crude import rights, including two energy giants - China National Petroleum Corp and China Petrochemical Corp.

In the past year, China National Chemical Corp (ChemChina), which is focused on petrochemical downstream businesses, got a quota of 10 million metric tons for imported crude, which was seen as a major step in breaking the monopolized oil import market in China.

However, Li Li, a senior manager at ICIS C1 Energy, a Shanghai-based energy information consultancy, said ChemChina's new status is significant, but it won't be easy for other private refineries to emulate.

"China's crude oil refining industry has been asking for years for the opening up of the crude import market," said Li. "Some positive policies have emerged gradually, but they don't make the new policy a 'milestone'."

The international oil majors would like to see China further open up its import market, which will mean huge benefits for them since the country is about to become the world's largest crude oil importer, she said.

According to a report by the United States Energy Information Administration, China's net oil imports will exceed those of the US on an annual basis within about two months.

"It is the trend that China's crude import market will be more market-oriented and less monopolized, but it is still uncertain how long it will take to fully realize (the change)," Li said.

"The State Council is the top policymaker and it usually takes a long time from the top down, which is similar to the process of economic reform as it involves many parties' interests."