China's Oil Products Market Begins to Open

By Hallam Chow, Partner and Lee Hill, Associate, White & Case

As part of China's efforts to honour its commitments to the World Trade Organization, the Ministry of Commerce (MOFCOM) adopted the Administration of the Oil Products Market Tentative Procedures (the Procedures) on November 15 2004 and the Procedures became effective on January 1 2005. The Procedures deal with the wholesaling, retailing and storage of refined oil products in China, and cover licence application and acceptance, examination procedures, and market supervision and administration. The Procedures will thus help make China's oil products market regulations and transactions more transparent and will provide opportunities for foreign enterprises to participate in the growing oil products market in China.

The Procedures set forth certain rules and regulations with the intention of strengthening "the supervision and administration of the oil products market, regulating the operational activities of the oil products business and safeguarding the order of the oil products market" (Article 1). "Oil products" are defined in Article 4 as petrol, kerosene and diesel. MOFCOM shall be responsible for the supervision of and administration over the oil products market across the PRC in accordance with PRC law (Article 3).