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China to allow more refiners to import crude oil: ministry
[BEIJING] China will allow more refiners to apply for licences to directly import crude oil, the country's commerce ministry said on Thursday, as Beijing continues to loosen its grip on a sector long dominated by state-owned enterprises.
Companies that meet certain environmental and capacity requirements can now apply for import licences, the ministry said in a statement posted on its website (mofcom.gov.cn).
Beijing has already widened the pool of companies to which it will award quotas for imported crude, although winners currently still have to nominate a state-affiliated trading company as an agent for their shipments.
"This is a policy that we've been looking forward to. This allows local oil refiners to apply for import licenses, in addition to the import quotas they are being approved to win," said Liu Aiying, head of an industry association based in Shandong that lobbies for independent refineries.
The move comes five months after the country's state planner issued the regulations that allowed non-major state refiners and independent oil companies to apply for imported oil quotas.
So far, five firms have been granted preliminary approval for quotas totalling 25.8 million tonnes or 516,400 barrels per day (bpd). Now those companies will be able to apply for licences to import the crude on their own rather than through state trading companies such as Zhuhai Zhenrong and PetroChina's trading arm, Chinaoil.
China, the world's second-largest oil consumer, has until now regulated its crude imports via a licence and quota system to ensure stable domestic supply. The government has pledged to open the energy sector to more private participation as part of broader reform to its often inefficient state enterprises.
Imports under so-called "non-state trade" will be limited to around 752,000 bpd for 2015, the ministry said late last year. China imported a total of 6.16 million bpd in 2014.
Domestic independent oil refineries, who act as China's main swing producers of refined products, have long been deprived of crude oil as feedstock, forcing them to import lower-quality fuel oil to turn out gasoline and diesel.