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Oil Rules Altered to Correct Quota Quandary

China yesterday announced a new import policy to replace existing import quotas for State-traded oil products next year as part of its commitment to the World Trade Organization.

 

But the quota lift is not likely to send shockwaves in the market as the government will impose internal controls over imported products by requiring importers to register their count, traders said.

 

They also said the price of oil products, most of which are fuel oil, are likely to rise by 15 to 20 per cent next year to feed the increasing demand.

 

The Ministry of Commerce said it will scrap the import quota for primary refined oil products including gasoline, gas oil, kerosene, naphtha and fuel oil, starting January 1.

 

Other than fuel oil, importers have to import oil products via four State-designated oil firms - Chinaoil, Unipec, Sinochem Corp and Zhuhai Zhenrong Corp.

 

Meanwhile, the ministry also lifted import quotas for other products including rubber, tyres and auto parts.

 

"Although the import quota has been lifted, volume control still exists, as the government does not want to see the market in disorder," said a manager from a State oil-trading company.

 

"But fuel oil imports are expected to rise next year to satisfy the market demand surge," said the manager.

 

China's oil product imports soared 49.3 per cent year-on-year to 23.74 million tons in the first 10 months.

 

Fuel oil, which accounts for the bulk of imports, reached 20.1 million tons, exceeding full-year imports by 22 per cent.

 

In July, the government decided to issue a total of 6.1 million tons of quotas for all oil products in 2004 to non-State firms.

 

(China Daily December 12, 2003)

 

Oil Import Quotas for Non-state Trading in 2004
China's Import Quotas for Oil to Rise 15%
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