China to expand oil import quota of non-state traders by 15 pct in 2008

The Ministry of Commerce announced on Oct. 29 that non-state traders in China will be allowed to import 19. 15 million tons of crude oil and 10.65 million tons of oil products in 2008, both increasing 15 percent over the quota of last year.

As compared with more than 100 million tons of crude oil import and 30-40 million tons of oil product import and the huge demand on the Chinese market, the import quota of non-state traders is really very little, and can not have an influence on the entire market supply and price, said Niu Li, senior analyst with the Economic Forecast Department of the State Information Center.

The current situation that international oil price has been hovering at a high level and much higher than domestic market, has more thwarted the non-governmental enterprises' zeal to import crude oil and oil product.

According to China's policy, the crude oil imported by non-state traders can not be sold on the market freely unless it is licensed by PetroChina or Sinopec, two state-owned oil giants.

Statistics show that in the five months of this year, China's private enterprises imported 3.294 million tons of oil products, only making up one-third of this year's import quota.

Now the import of private oil enterprises is thwarted on one hand, and the shortage of oil supply has re-emerged on the other hand. International oil price has topped 93 US dollars recently, but China's oil product which is controlled by the National Development and Reform Commission, remains unchanged.

The shortage of oil supply in part areas can not reflect the entire supply in China, said Niu Li, adding that China's oil product supply and demand is balanced generally.

China's oil output and import are big enough to meet the domestic market demand, which has basically grown 7-8 percent annually in the recent years, said the analyst.

In a short term, Chinese government will not take a measure of adjusting up oil produce, but it is more likely to ease the supply pressure through price subsidy, the analyst added.