Break up of State oil monopoly?

In the service industries, which are considered a competitive area and include telecommunications and finance, a series of measures will be taken by the government to promote market access and competition.

In the domestic oil market, three main State-owned petroleum giants — China National Petroleum Corp, China Petroleum and Chemical Corp and China National Offshore Oil Corp — have dominated main business areas, including oil exploration, refining and retailing, for the past decades.

Xu said he believes that the oil station business should be made independent from CNPC, Sinopec and CNOOC and more encouragement should be given to foreign and private investors to create more competition in terms of price, quality and services.

Although it was opened to foreign investors in 2004, the domestic petrol station market is still dominated by Sinopec and CNPC, both of which own more than 80 percent of the country's petroleum retail market.

By the end of 2011, Sinopec had more than 30,000 petrol stations. By the first half of 2012, PetroChina had more than 19,000 petrol stations, accounting for about 40 percent of the market share.

Private and foreign companies planning to enter the oil station sector still face some market restrictions. Petrol station operators are required to have stable oil supplier.

Those who cooperate with CNPC and Sinopec as their oil suppliers need to provide a supply contract of more than three years to the local government in Chongqing municipality and others are required to have their own oil storage with ample reserves.

"This requirement represents a big burden for private oil station owners," Ye Tan, a renowned financial commentator wrote in her blog.

"CNPC, Sinopec and CNOOC own the franchise of oil exploration, so we can't exclude the condition that they discriminate against downstream enterprises at the oil refining and retail segments, taking advantage of their control of the industrial upstream. When crude oil production is limited, main SOEs may decrease their supply to other refining companies, which would suffer production reductions in that case," said Xu.