Draft rules for oil-trade cause concern

September 01, 2006 | BY

clpstaff

By the end of 2006, pursuant to its agreement with the World Trade Organization, China will allow foreign companies into the business of distributing petrol…

By the end of 2006, pursuant to its agreement with the World Trade Organization, China will allow foreign companies into the business of distributing petrol and other oil products from refiners to filling stations, which to date has been dominated by the state-owned Sinopec and PetroChina.

Foreign oil companies are currently allowed to operate a limited number of filling stations independently or as part of a larger network with domestic partners.

However, The Wall Street Journal reports that a draft version of the new distribution rules is vague on major points about the requirements for licences and what exactly it allows. This is causing some concern for foreign companies that are eager to gain wider access to China's growing market for oil and to develop their strategies for market entry at a wholesale level.

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