Wholesale oil market to open to foreigners
(Shenzhen Daily/Agencies)
Updated: 2006-02-07 14:54

The country will open its wholesale oil products market to foreign investors by the end of this year to meet its World Trade Organization obligations.

The move is also in line with previous government statements that China is planning to liberalize sectors ranging from electricity to coal to water in the years ahead.

As part of the planned reforms, the government may hike oil product prices further to narrow the gap between domestic and international markets, according to a Xinhua report in January, which cited Li Deshui, the director of the statistics bureau. But Li did not give a possible timetable for such a hike.

Over the last year or so, China has kept domestic prices of retail oil products artificially low to counter inflationary pressures as world oil prices soar. Domestic oil refiners have repeatedly complained about the low prices, which have widened their operational losses.

Given the country's huge appetite for oil products, as well as the prospect of more price hikes, the domestic refining industry will "become more market-driven and see fierce competition between domestic and foreign refiners after its opening," Xinhua quoted Wang Jiming, deputy chairman of China Petroleum and Chemical Corp, or Sinopec, as saying yesterday.

The country's demand for gasoline, kerosene and diesel will surge, reaching 185 million to 189 million metric tons in 2010, Xinhua said.

Ethylene consumption will total 25 million to 26 million tons by that time, the news agency added.