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Call for oil monopoly to be broken up
2013-12-10

Foreign and private companies step up activities in retail trade
China should set up an independent company to operate the oil wholesale business and manage the supply to retailers, industry experts have suggested. That would break up the de facto monopoly of the three state-owned large oil companies, especially the two onshore oil giants, they say.
Many of China's petrol stations are run by Sinopec Ltd and PetroChina Co Ltd, and although those owned by foreign companies and private investors do exist, they have a marginal significance in terms of market share.
"One way to get fair market competition in petroleum is to change oil retailing by prizing the petrol station business out of the grip of the three main state-owned oil enterprises and setting up another SOE that would run them," says Xu Baoli, director of the research center of the State-owned Assets Supervision and Administration Commission. This year, China's new leaders have pledged a series of economic reforms to invigorate the economy, dismantling the SOE monopolies in industries including petroleum, telecommunications and finance.

During the World Economic Forum in Dalian, Liaoning province, last month, Premier Li Keqiang said China was now at a crossroads and the country would not achieve sustainable economic growth unless there was structural upgrading and transformation. In the domestic oil market, the three main state-owned petroleum giants, China National Petroleum Corp, China Petroleum and Chemical Corp and China National Offshore Oil Corp, have dominated the main business areas, including oil and gas exploration, refining and retailing, for many years