China reaffirms crude premits to Sinopec, CNPC

China has reaffirmed permits for crude distribution and storage to CNPC and Sinopec Group, two months after their listed vehicles received similar licenses, maintaining dominance of the top two energy giants.

The Ministry of Commerce said on its Web site (http://www.mofcom.gov.cn) that it also granted three licenses to distribute refined fuel and another three for refined fuel storage, which mostly went to independent firms.

Beijing in late 2006 set a new threshold for domestic and foreign-funded firms to apply for distribution rights in the world's second-largest oil market, in line with its commitment upon joining the World Trade Organisation at the end of 2001.

But analysts have said that the country's oil duopoly would most likely stay in firm control of crude licenses.

In late July, the ministry issued the first batch of crude permits totalling five, to firms including Sinopec Corp (0386.HK: Quote, Profile , Research) and PetroChina (0857.HK: Quote, Profile , Research), the listing arm of Sinopec Group and CNPC, respectively.

So far the venture of U.S. giant Exxon Mobil Corp (XOM.N: Quote, Profile , Research) and Saudi Arabia, which are building a refinery with top state refiner Sinopec Corp in southeast China, was the only foreign-funded firm to have won a fuel distribution permit.